here. Basically, they fell into so much debt that their largest creditor, Verizon, had enough and told them to pay up. Clearly, Amp’d couldn’t, and then went into bankruptcy proceedings. It all came to an end on July 23rd, when Amp’d announced that they would shut down. But now they’re back to collect $10 million they paid to creditors right before filing for Chapter 11.
Amp’d Mobile said that it was insolvent at the time it transferred the funds to Merrill Lynch on April 9, 2007. Because the transfer – made on account of an old debt – occurred within 90 days before the Chapter 11 filing in June 2007, it is recoverable, the company said. Bankruptcy laws allow a debtor company to try to retrieve preferential transfers – payments or other transfers of property in the time immediately before a Chapter 11 filing, when distressed companies are considered vulnerable for attack by heavy-handed creditors.Ah, so they’re playing Merrill like the bully here. Not bad. Merrill isn’t the only entity being sued here, though. Amp’d is also suing Latham & Watkins, U-Tek Digitial Co., Perfect Connection LLC, and Playboy Enterprises International Inc. These sums are much smaller, for the most part under $1 million. The best part is that they’re trying to hit up former CEO Peter Adderton for $1.15 million, which he received right before bankruptcy. Once the filing was made, Adderton stepped down as the company’s chief executive. No idea what they’ll get, but they’ll surely recover a few million. [Forbes]]]>