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Beyond Oblivion files bankruptcy to sell assets after funding failure
By Caroline Salls
Pittsburgh, Jan. 25 - Beyond Oblivion, Inc. filed Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the Southern District of New York.
According to statements filed with the court, the company realized toward the end of 2011 that it would not be able to raise enough debt and equity capital to make payments to content providers and conclude negotiations with operators and device manufacturers, which would have allowed a commercial launch of Beyond Oblivion's music service.
The company's board of directors said in a consent statement filed with the court that Beyond Oblivion had previously decided to wind down its business, but was unable to secure financing to fund the wind down.
As a result, the board said it would be in the best interests of the company and its stockholders to file for bankruptcy and liquidate and dissolve Beyond Oblivion.
In conjunction with the bankruptcy filing, the company has obtained a commitment for $750,000 of debtor-in-possession financing from lenders Clifford Burnstein and Allen & Company LLC.
Interest will be 10%, and the DIP loan will mature on the earlier of March 30 and the closing of the sale of substantially all of the company's assets.
A hearing on the DIP facility is scheduled for Jan. 26.
According to court documents, Beyond Oblivion had $1 million to $10 million of assets and $100 million to $500 million of debt.
The company's largest unsecured creditors are Sony Music Entertainment of New York and Warner Music Inc. of New York, both with $50 million trade debt claims.
The company is represented by Duane Morris LLP.
Beyond Oblivion is a New York-based digital music company. The Chapter 11 case number is 12-10282.
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