It appears a sale is imminent for bankrupt Trans National Communications International Inc. (TNCI), putting agent contracts in limbo.
TNCI on Friday filed an asset purchase agreement (APA) with the federal bankruptcy court in Massachusetts to name Blue Casa Telephone LLC, Santa Barbara, Calif., as the stalking horse bidder in its Chapter 11 bankruptcy proceedings.
Blue Casa is a provider of residential and business telephone services in California.
The hearing on APA is scheduled for Wednesday, Feb. 13. If approved, the company will accept bids for a period of 30 days, with a buyer being named as early as mid-March.
“I believe this to be the best possible selection for the company, its employees, our agent partners and our customers,” said TNCI CEO and President Brian Twomey in a statement provided to Channel Partners.
TNCI filed for Chapter 11 bankruptcy protection Oct. 9, 2011, and had expected to emerge from bankruptcy in spring 2012, but negotiations with the creditors stalled and by summer, the companies were moving forward with the bankruptcy sales process.
The stalking horse bidder is chosen by the bankrupt company to make the first bid on its assets. Once the stalking horse has made its bid, other potential buyers may submit competing bids for the bankrupt company’s assets. In essence, the stalking horse sets the bar so that other bidders can’t low-ball the purchase price.
Should Blue Casa be the high bidder, it is unknown whether agent agreements would be accepted. Bill Power, CEO of the Agent Alliance, which is a member of the creditor’s committee along with Sprint and Verizon, told Channel Partners that Blue Casa has not made a commitment to accept agent contracts. “Blue Casa has done nothing to engage us — not just the Agent Alliance, but the channel,” Power said. “That’s creating a lot of concern.”
If the agent contracts are rejected, they become unsecured creditors, Power said.
TNCI informed agents of the filing Tuesday and planned a conference call for Monday, Feb. 4.
In financial statements filed with the court, TNCI projects 2012 total revenues of $73.3 million. Of its projected $60.2 million in total direct costs, TNCI anticipated that agent commissions will account for nearly $8.3 million in costs. The company listed liabilities of $17.9 million and total assets of nearly $14.7 million as of December 2011.
Citizens Bank of Massachusetts is one of TNCI’s largest secured creditors with a claim of roughly $4.3 million. Some of the company’s largest unsecured creditors include AT&T, Sprint and Qwest Communications (now CenturyLink), which is owed nearly $2 million, according to the initial bankruptcy filing. Sprint is owed more than $5 million while AT&T is owed roughly $1.66 million.
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February 15 2019 @ 14:45:26 UTC