Company Overview: An online mobile marketplace connecting passengers with limo and private car services worldwide. The company had over $25M invested.
Situation: Equity partners looking for a layer of protection / an inexpensive insurance policy
After the equity investors and debt holders had lost confidence in an online and mobile marketplace for chauffeured transportation, they foreclosed on the company and sold the assets for a very marginal amount. Chapter 7, also referred to as a Liquidation is an option available to private companies in distress. The business assets are sold and proceeds of the sale are distributed to creditors. Because the assets were worth very little, most creditors were left with no path of recourse. The equity partners wanted a layer of protection between them and the disgruntled creditors.
VEER Group’s Role: Building a legal wall between the old and new company
Unanimously, the investor’s voted to hire the Veer Group for their expertise in the Chapter 7 process management and filings. This task was complex initially because the company was headquartered in California, had employees and tax filings in multiple states, yet was incorporated in Delaware. Secondly, the data required for the filings was extememly difficult to obtain. Our experienced and diligent group’s responsibilities included:
• Collecting the extensive company financial, legal and tax information and documentation
• Working with legal teams from multiple states to create and file the petition for the bankruptcy court
• Ensuring all creditors, vendors, suppliers and former employees received the required communications
• Working with Delaware’s Division of Corporations office to file the required state forms
• Meeting with the assigned court trustee and attending the meeting of the creditors to address all questions about the petition and company finances
Results: Reducing risk
A discharge from the courts typically releases the company owners from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor.
In less than 120 days, the company was successfully dissolved with no disputes from the creditors, former, suppliers, former employees or the court. VEER Group’s work on dissolving the business entity reduced risks by adding an additional layer of protection for former investors from the old company’s obligations and legal action.