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Former Velocity Express Corp. case proceeding with preference actions
By Jim Witters
Wilmington, Del., Sept. 5 - The Chapter 11 case of VEC Liquidating Corp., formerly Velocity Express Corp., is proceeding with settlements and prosecution of preference cases, an attorney told the court on Sept. 5.
Judge May F. Walrath said she ordered a status conference in the case because little action had been evident on the docket in the U.S. Bankruptcy Court for the District of Delaware.
Debtors attorney Russell C. Silberglied told the judge that of 103 preference actions filed, 37 remain in progress.
"Many of the cases have been settled without litigation, including the majority of cases measured by dollar amount," he said.
VEC also has been collecting money from Canadian accounts receivable, using the proceeds to pay Chapter 11 expenses and trustee fees.
"This company has been cash positive since the (2009) sale. It still is administratively insolvent, but the amount of the insolvency is shrinking, not growing," Silberglied said.
The company sold substantially all of its assets to ComVest Velocity Acquisition I, LLC in November 2009.
ComVest Velocity is a subsidiary of private investment firm ComVest Investment Partners III, LP.
The purchase price included $9.77 million, which will be applied to the repayment of senior notes, plus the outstanding obligations under the company's debtor-in-possession agreement and Burdale credit agreement, cure costs and $50,000 in cash.
The company changed its name to VEC Liquidating Corp. in February 2010.
Velocity Express, a regional delivery services provider based in Westport, Conn., filed for bankruptcy on Sept. 24, 2009, in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-13294.
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