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Movida to wind down business if sale attempts fail
By Caroline Salls
Pittsburgh, April 4 - Movida Communications, Inc. received court approval to wind down its business and launch an immediate termination of its pay-as-you-go wireless voice and data communications service, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.
However, Movida also obtained court approval to solicit bids for a transition or sale of its operations and/or assets.
The company said it has received several expressions of interest in various transactions, and it will solicit formal bids through 4 p.m. ET on April 7.
If more than one bid is received, Movida will hold an auction on April 8. The sale hearing is scheduled for April 9.
Movida said it included the sale option in the wind-down motion "in the event that a white knight comes forth."
According to the motion, Movida's assets are fully encumbered by liens held by its pre-bankruptcy lenders. As a result, the company said it cannot fund its operating expenses without the consent of the lenders.
"Given the debtor's dire financial constraints, absent concessions from its key creditors, including Sprint, and a viable proposal for the immediate sale of its assets, the debtor will be forced to discontinue service and terminate operations," Movida said in the motion.
As previously reported, Movida filed for Chapter 11 bankruptcy on Monday after attempts to renegotiate a Sprint agreement in an effort to avoid an "impending liquidity crisis" were unsuccessful.
Movida is a Kansas City, Mo.-based mobile virtual network operator that provides wireless services to Hispanic communities. Its Chapter 11 case number is 08-10600.
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