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Neverblue to be Sold at Auction to Pay Debts

According to DowJones.com, Velo, the parent company of Neverblue and AKMG has been given the go-ahead to sell its assets at a bankruptcy auction. As part of this process, Neverblue will be auctioned off to pay Velo’s debts, and will be bought by the highest bidder.

Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan signed off Wednesday on Velo’s auction rules and timeline, setting a July 31 auction date for two separate sales: equity in the reorganized Velo and its Neverblue Communications Inc. business.

Velo’s lead lender, Barclays Bank PLC, has offered to set a floor price for both sales, court papers show. It’s offering to forgive $80 million of $385 million in total loan debt for the right to sponsor Velo’s Chapter 11 plan, which would give it ownership of the reorganized Velo. And Barclays has offered to forgive another $20 million in debt for Neverblue, Velo’s lead-generation business.

Under the auction rules Glenn approved, interested bidders must submit their offers for either business unit by July 27. Bids must be in cash and equal or exceed the amount of Barclays‘s debt forgiveness.

Velo said it would notify bidders by July 29 whether their offers meet its qualifications to participate in the July 31 auction.

As part of any bankruptcy auction, the new owner is not required to pay the debts of the company and can buy the company only for its assets, not necessarily its debs. The court can easily approve, and usually does  approve the sale of the assets “free and clear” of all liens and liabilities. This means that in theory, affiliates and publishers could not be paid. However, Neverblue issued the following statement that they believed that this sale would not affect the the company, and that they believe that whomever bought it would buy the debts also.

As one of our partners, we wanted to provide you with a brief update regarding the Chapter 11 process of our parent company, V2V Holdings LLC.  As our parent company noted in its initial filings, its Board of Directors and senior lenders are considering a potential sale of Neverblue Email (formerly known as AKMG) and Neverblue.  In the next few days you will receive a legal notification that outlines the bidding procedures for the sale of the Neverblue companies. As a result of this process, Neverblue will be sold to either the lenders (including General Electric Capital Corporation and Goldentree Asset Management) or a strategic or financial acquirer. I want to assure you that it will not impact Neverblue Email’s ability to meet your needs in any way.  We believe that both our lenders and any potential acquirer would be highly committed to ensuring that the Neverblue companies can fulfill their potential and continue to offer the same great service clients have come to expect.

Our business is performing well and we continue to operate business as usual without interruption.  We value our relationship with you and look forward to continuing to work with you for many years to come.

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About Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

38 comments

  1. What happen with online adv industry ? after WWA got some problem with their obligation to release the payment now Neverblue facing a problem too…bankruptcy !! I’m not putting my attention on this issue and I don’t know in clearly what is going on but it seem some adv network company facing some serious problem.

    • I started transfering everything away from neverblue, I do not trust it at all.

    • It’s saddening what is happening to the industry NVB is like hundreds of million in debt! Crazy!!

      • Neverblue is actually profitable & stable itself. Its parent/holding company is the one who went bankrupt and so NB will be sold off to another buyer and continue to run as normal.

  2. Ok I understand now why Neverblue contacted me to re-apply 2 days ago. They want to have a maximum of prospects before being sold?
    If I want to confirm my registration I need to provide them how much money I earn with other networks… sure, are you serious ?!

  3. This is bad news. Most companies bought from bankruptcy are bought in pieces and the debts wiped out. If you are an affiliate owed money from Neverblue, look out!

  4. We can only hope they are bought out by someone who cares about the industry enough. But maybe they’ll only be in it for the connections with major brand advertisers. We shall see!

  5. At least something is happening now. I just hope that the highest bidder will be one that has the knowledge and care for the industry.

  6. I was denied a few month ago. Now they emailed me asking me to re-apply. Bad news, they are contacting all their denied affiliates desperate for income?

  7. Don't Be An Idiot

    If you’re driving traffic to Neverblue or AKMG, STOP NOW. Of course they’re going to be optimistic and say “this won’t affect business, we’re doing well.” What are they going to say? Yes, we are going to be sold and you might not get paid?

    Driving traffic to NB and AKMG are huge risks…don’t be one of those people that kept driving traffic to Epic after cash flow problems started and Copeac after the FTC came knocking. We all knew how that wound up. Common business sense.

    • Dude is smart. Don’t forget the people who are optimistic are employees not the owners, they have no idea what is going on.

      AKMG is no longer AKMG. They are now “Neverblue Email”

  8. Neverblue Affiliate

    Let’s look at this? Company in bankruptcy, being sold, no one is running offers anymore?

    Anyone else see an issue here?

  9. they paid me for last month

  10. I really hope Donald Trump buys them.

  11. Neverblue Bounced Check

    My neverblue check bounced. It was only $56, still?

  12. Does anyone know which I-bank is running the auction and/or the name of the restructuring advisor? Also, does anyone know someone in the bank group that is running the creditors committee?

  13. Now I can Demand Twice weekly payments!! use this publication as Leverage… muahaha

  14. I just put a cheque in my bank from them yesterday…I’m hoping it’ll clear as I don’t want to be left holding the bill for rubber cheques if that happens.

    Epic Direct and Neverblue have consistently been my best networks…I’m wondering if it’s time to switch to affiliate networks or e-commerce….Looks like a scary place for us CPA marketers at the moment.

    Ollie

  15. Wow! I was a NB affiliate a couple of years ago. I left and went to CJ. Just got a letter in the mail from the Bankruptcy Judge handling the case. Too bad, they were good when they were good.

  16. Neverblue Bounced Checks?

    Neverblue owes me over 10k. Last check bounced and haven’t heard anything except a letter from the judge that they don’t havre to pay me? Neverblue = Out of Business!

  17. InB4 “Neverblue can’t pay me even though I knew about their troubles months ago”

  18. I just got the letter too… eek.

  19. Affiliate marketing is dead, clearly.

  20. Is affiliate marketing dead, this is an obvious sign.

  21. NeverBlue Affiliate

    Optimism will always trump a $400 million outstanding debt…

    But seriously folks, RIP Neverblue

  22. Would love to buy them out,
    If only I could get in on the auction lol; oh well..
    Too Bad they gotta sell just to pay debt, must be pretty shitty for the owner.

  23. Maybe I could bid on their mousemats. I bet they have some really good quality mousemats.

  24. It’s nice to see that creditors are able to get something through the bankruptcy process.

  25. I never heard of bankruptcy court in my country before…amazing…

  26. Thanks for posting more information on the case.

  27. Many companies who file for bankruptcy while do it under the process of Chapter 11 bankruptcy protection. Unfortunately many of the Chapter 11 bankruptcy cases fail to help companies reorganize debts. As mentioned above at times the process will involve the sale of assets that can then be used to repay creditors of the company.

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