NetVersant bankruptcy close to resolution
NEW YORK--According to bankruptcy court documents and an attorney working on the case, new NetVersant Solutions owner Patriarch Partners are close to moving beyond bankruptcy proceedings and continuing NetVersant's work as an IT and security integrator.
On Jan. 6, Patriarch Partners, "a vertically integrated distressed private equity firm," closed on NetVersant Solutions with the newly created NetVersant Acquisition LLC. According to court papers, "The aggregate consideration for the purchased assets will be the assumption of the assumed liabilities."
While calls to Patriarch were not returned over the course of two days, the company's Web site indicates it is experienced in turning around troubled companies like NetVersant. It "was built upon a proprietary patented financial model designed to manage and monetize the distressed portfolios of financial institutions," and currently manages funds with more than $6 billion of equity and security loan assets involving 65 companies. Patriarch has controlling interested in roughly two thirds of those companies.
And NetVersant is definitely distressed. In a financial report required by the bankruptcy court, the company reported losses of nearly $10 million for the period spanning Nov. 19 through Dec. 31. While the company took in $12 million in revenue, its costs of services on those sales was just under $12 million, resulting in a gross profit of just $229,000. This resulted in an operating loss of $7 million, and a net loss of $9.7 million.
There were bright spots, however. NetVersant's Southern California operations had a net income of nearly $1 million, and the Denver, Atlanta, and Mid-Atlantic operations were also profitable.
According to attorney Debra Simpson, who is representing NetVersant as part of the Jones Day law firm, NetVersant Acquisition cleared a large hurdle on Monday when it substantially got the go-ahead to withdraw nearly $16 million from a trust account that was set up to fund potential statutory or common law trust claims. This money will be transferred to Wells Fargo to pay down a note associated with the bankruptcy, according to court papers.
Claims against NetVersant continue from subcontractors and others, Simpson confirmed, but she would not talk about the size of those claims.
In court papers, Arch Insurance claims NetVersant owes it as much as $1.6 million. The Chester Community Charter School is looking to recover $38,000 it paid to NetVersant. Other claimants may be working through Logan & Company, which is administering the bankruptcy for NetVersant.