Amp'd Mobile tries to recoup funds
In its heyday, wireless carrier Amp'd Mobile Inc. raised hundreds of millions of dollars in venture funding from such prominent sources as Intel Corp.'s venture arm and Viacom Inc.'s MTV Networks, as it marketed mobile content to the young and the hip.
Today, the bankrupt company is trying to raise cash to repay creditors by recouping funds paid out before its Chapter 11 filing, auctioning intellectual property and possibly through additional legal measures. Amp'd lawyer Steven Yoder of Potter Anderson & Corroon LLP said the debtors hope to be in a position to file a liquidating plan by late spring or early summer.
Amp'd is seeking to recover funds from at least 20 parties, ranging from former CEO Peter Adderton to professional firms such as Merrill Lynch & Co., GE Capital Financial Inc., Latham & Watkins LLP and to media companies including MTV Networks on Campus Inc. and Playboy Enterprises International Inc. Merrill, MTV and GE declined to comment. Other companies could not be reached.
The company seeks as much as $1.15 million in payments made to Adderton. Pleadings said that the ex-executive "refused to perform certain aspects of his employment" and "threatened to take actions that would damage" the company. No specific actions or damages are given, however, and it is unclear whether the passages merely describe a management dispute between Adderton and the board. Yoder declined to elaborate, and a spokeswoman for Adderton declined to comment.
Meanwhile, Amp'd has retained William Morris Agency LLC, Quinn Pacific and Mosaic Capital LLC to shop its intellectual property. The assets for sale include the company's brand, trademarks, content such as the "Lil' Bush" cartoon detailing the misadventures of the president as a child, and a mobile content studio.
During its life as a wireless carrier, Los Angeles-based Amp'd targeted the 18- to 34-year-old crowd. The company heavily marketed video, music and other forms of content. In addition to Intel's VC unit and MTV, its backers included Vivendi SA's Universal Music Group, Columbia Capital of Alexandria, Va., Highland Capital Partners Inc. of Lexington, Mass., and others.
While it grew quickly, Amp'd also had problems collecting funds from its hip clientele. The company filed for bankruptcy protection on June 1 after it missed a payment to Verizon Wireless and the Basking Ridge, N.J.-based carrier threatened to shut down its network.
Last summer, Amp'd sold its customers to Prexar Mobile in a complex deal valued on a sliding scale. Kennebunk, Maine-based Prexar would pay a flat amount based on the value of a customer's plan, plus a percentage of the net income the account produced. The estate would also get 25% of Prexar's stock. Yoder said the exact return to the estate from the transaction is still uncertain.
Amp'd has also sold mobile phones held in inventory, office furniture and other assets during the bankruptcy.
"We're cautiously optimistic that through the recoveries from the avoidance auctions, other potential actions and the sale of the IP assets, that there may be a recovery for unsecured creditors in the case." Yoder said.
Coming before the unsecureds in the pecking order is U.K. firm Kings Road Investment Ltd., which holds some $30 million in secured debt.