Edgenet $7.98 million asset sale approved; noteholders seek conversion

By Caroline Salls

Pittsburgh, June 12 – Edgenet Inc. received court approval of the $7.98 million sale of substantially all of its assets to EdgeAQ, LLC, according to a June 12 filing with the U.S. Bankruptcy Court for the District of Delaware.

EdgeAQ was formed by former Edgenet employees Steve Proctor, Chris Dowdy and J.J. Freitag for the purpose of purchasing Edgenet's assets.

As previously reported, PCF Number 2, Inc. was the stalking horse bidder, with a proposed purchase price of $6.5 million.

Under bid procedures approved in May, PCF was slated to receive $395,000 in bid protections if it was not the high bidder, comprised of a $195,000 breakup fee and a $200,000 expense reimbursement.

In addition, the company’s official committee of noteholders asked the court to convert Edgenet’s Chapter 11 case to Chapter 7 bankruptcy.

“After selling their assets, the debtors have nothing further to achieve in Chapter 11 and, in fact, remaining in Chapter 11 is not in the best interests of the estates and their creditors,” the committee said.

The noteholders said a Chapter 7 trustee can wind down the company’s estates, continue committee investigations and, if appropriate, file causes of action.

Also, the committee said there is not a reasonable likelihood that Edgenet could confirm a Chapter 11 plan.

A hearing on the case conversion motion is scheduled for July 10.

Edgenet, an Atlanta-based provider of cloud-based content, applications and services, filed for bankruptcy on Jan. 14. The Chapter 11 case number is 14-10066.

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