Pareteum Corporation and certain affiliates announced that the company filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
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The Company intends to execute a strategic asset sale under section 363 of the Bankruptcy Code while addressing legacy issues to best position the business for future success.
Prior to the filing of the Company's Chapter 11 cases, the Company's Board of Directors and management evaluated a wide range of strategic alternatives and implemented a strategic asset sale strategy.
After a thorough marketing process to obtain a "stalking horse bidder" for a court-supervised sale process and as a result of arm's length negotiations, Circles MVNE Pte. Ltd. has combined with Channel Ventures Group, LLC to execute a stalking horse asset purchase agreement for substantially all of the assets of the Company.
Circles has agreed to acquire the Company's Mobile Virtual Network Enabler (MVNE) business and associated contracts, and CVG has agreed to acquire the Company's Mobile Virtual Network Operator (MVNO), IDM, iPass, and Small and Medium Business Enterprise (SMB) businesses and associated contracts.
These agreements are subject to higher and better offers, among other conditions, as well as approval from the Bankruptcy Court.
The Company expects to continue operations as usual during the Chapter 11 process and complete the process in a swift manner.
To help fund and protect its operations, Pareteum has received a commitment from Circles for up to $6 million in debtor-in-possession ("DIP") financing. Upon approval from the Bankruptcy Court, the DIP financing, along with normal operating cash flows and the consensual use of cash collateral, will fund post-petition operations and costs under normal terms.
The Company has filed customary motions with the Bankruptcy Court intended to allow Pareteum to maintain operations in the ordinary course including, but not limited to, paying employees and continuing existing benefits programs, meeting commitments to customers and fulfilling go-forward obligations, including vendor payments.
Such motions are typical in the Chapter 11 process and Pareteum anticipates that they will be heard in the first few days of its Chapter 11 cases.
Pareteum is a cloud software communications platform company with a mission - to Connect Every Person and Every(Thing). ■