Ipix assets to be sold at auction

Bidders now vying for everything from name to technology
Sunday, October 1, 2006

FAIRFAX, Va.--Filing for Chapter 7 bankruptcy was just the first step in a long process of devolving Ipix, the surveillance and imaging company who on July 31 announced it had ceased operations. Donald King, an attorney with Odin Feldman & Pittleman, based here, will now be charged with overseeing the liquidation of the company's assets, and he'll be assisted by Stephen Karbelk, executive vice president of Tranzon Fox, who'll be directing the auction of everything from the company's sophisticated 360-degreee surveillance technology to the company's name and web site. Tranzon Fox is one of the largest auction houses in the country, completing roughly 1300 auctions annually.
"I've had some larger auctions," said Karbelk, "but in terms of complexity [Ipix] ranks right up there." There are patents, licensing considerations, even a patent lawsuit to work through, he said, "and it's just a very interesting technology."
The process began in early September, and buyers had the rest of the month and into October to consider Ipix's assets and submit multi-tiered sealed bids. The assets will be divided into three categories: a 360-degree Digital Immersive Video business line, the Still Photography business line, and the Gigapixel Camera patents, which allow for "an experimental high-resolution camera developed through a federal government research project."
Since the two business lines may depend on the same patents, it's possible a patent could be purchased by one party, which would then have to license that patent to another company so that one business line wouldn't be rendered useless. The Ipix name and web site, www.ipix.com, are also available.
After the bidding process concludes, the bankruptcy court must then approve all bids, and companies will be allowed to appeal to the court during that process. "The nice thing about this process is that it's open," said Karbelk. "But we always encourage buyers to be part of the process from the beginning so they can have a standing to out-bid after the fact."
One party who won't be participating in the bidding is Sentry 360 Security, the first reseller of Ipix's security camera, released in April, 2004. Instead, said company chief executive officer Thomas Carnevale, Sentry 360 will be releasing its own 360-degree camera at ASIS International, something Carnevale wasn't planning to do until December, but which Ipix's bankruptcy pushed forward.
Under the brand Fullsight, Sentry 360 will attempt to fulfill its obligations to Ipix customers, giving a discount to current customers who want to install more cameras and committing to servicing Ipix cameras currently in the field. He also believes his Fullsight product improves upon the Ipix cameras. He has increased the resolution, he said, along with adding an analog output, installing video analytics using an in-house developed algorithm, and increasing the frame rate to 12 frames per second "with no bandwidth issues."
"We believe in the technology," said Carnevale, "and the market for 360 technology." However, he will not be bidding to secure any of Ipix's patents and he thinks it will take even a Sony or Pelco, should they acquire the patents, at least six to nine months to bring a product to market.
Karbelk at Tranzon Fox is mostly interested in completing the sale in a timely and efficient fashion, but he did seem genuinely interested in how Ipix might play out. "What's so exciting," he said, "is this could be a situation where, broken up, the company could be worth more than the company as a whole."
How much might it fetch? "The company at one point did have a valuation of $100 million," he said, "and beyond that, I don't know. What I do know is that the assets will be sold to the highest bidder. It doesn't matter what the number is, but the assets are going to be sold ... The message to anybody in this business is: If you have any interest, now is the time, because the trustee is going to sell it."