New York data services provider files for Chapter 11

Broadview Networks, Inc., a business data provider of phone and Internet services, has sought to reorganize its debts through a Chapter 11 bankruptcy filing while obtaining protection from creditors. The company announced in July that it had reached an agreement with some of its creditors to commit to a financial restructuring plan. This plan would give the creditors equity in the company as well as new five-year payment notes in exchange for wiping out $300 million in senior secured notes scheduled to mature on Sept. 1, 2012. The company’s current largest equity holders are MCG Capital with 51 percent and Baker Communications Fund with 15 percent. Several other investors supported the restructuring agreement. Broadview Networks listed about $500 million in total debt and assets in its bankruptcy documents. The business’s parent company, Broadview Network Holdings Inc., reported $5.3 million in net loss for the first quarter of 2012, with assets of about $260 million and liabilities exceeding $370 million. The company’s revenue fell from about $407 million in 2010 to $378 million in 2011. The company is getting itself back on track, however, with about 36,000 current U.S customers and a sound new business model. In fact, many companies that experience extreme… Continue reading

Housing recovery likely delayed due to Sandy

The housing market may take even longer than expected to recover in the wake of Hurricane Sandy. While foreclosure filings across the United States were down 19 percent in October from the same period last year, October saw an increase from September in both foreclosure starts and overall foreclosure filings, according to data from RealtyTrac, a market research company. New York, New Jersey and Connecticut saw the biggest increases in foreclosure filings for the month of October. The New York area already has one of longest foreclosure processes in the nation, with foreclosures taking longer on average to complete than other areas of the nation. This likely will get worse as a result of moratoriums on foreclosures that have been put into place following Hurricane Sandy. One option for New York-area homeowners who face long foreclosure processes may be filing for Chapter 13 bankruptcy. Chapter 13 bankruptcy allows homeowners avoid foreclosure on their homes and obtain a fresh financial start. Under Chapter 13, the homeowner establishes a court-supervised repayment plan that provides for monthly payments to creditors over a period of three to five years, depending on the homeowner’s monthly income. The Chapter 13 repayment plan allows the homeowner to… Continue reading

New York software developer files for Chapter 11

Kit Digital Inc., a New York-based company that develops software used to manage digital video, has filed for bankruptcy after reaching a negotiated restructuring agreement with a shareholder group. TheChapter 11 petition was filed in late April in the U.S. Bankruptcy Court for the Southern District of New York. The petition lists assets in excess of $10 million and debts of a similar amount. The company had announced earlier in April its intent to file for bankruptcy with a debt repayment plan that has been approved by three of its largest shareholders. The plan has not yet been posted on the court’s docket. Kit Digital’s most recent financial statements show that the company made $107.3 million in revenue for the six month period ending June 30, 2012. During the same period, losses from operations totaled $110.8 million, including a charge for goodwill impairment in the amount of $55 million. The company’s largest unsecured creditor is the Jones Day law firm, which has a claim of $1.6 million for legal fees and services. Kit Digital’s situation illustrates how a business that cannot operate profitably due to operating losses and debt may find relief through a Chapter 11 business bankruptcy. After filing… Continue reading

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