Pipeline Data Inc. (PPDA:US), a provider of payment-processing services for merchants, filed for bankruptcy protection in Delaware and plans to sell its assets.
The company listed assets (PPDA:US) of less than $10 million and debt of more than $50 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Ten affiliates also sought court protection.
Pipeline Data, through its subsidiaries, provides payment- processing services to small and midsize retailers that operate in physical “brick-and-mortar” stores or over the Internet, according to its website. The Alpharetta, Georgia-based company provides services to about 15,000 merchants, according to court documents.
The company was hurt by merchant closures and a lack of new clients to make up the difference and was unable to “acquire merchant portfolios and sales channels on terms that would improve its financial condition,” according to court filings.
“Pipeline has determined that a structured sale process with defined milestones under the protections of Chapter 11 would be the quickest and most efficient way” to “maximize proceeds to benefit creditors,” Brian Rosenthal, the company’s financial adviser, said in court papers.
The company said it has found a potential buyer for its assets. A phone call to Brent C. Strickland, a lawyer representing Pipeline, seeking the identity of the proposed purchaser and offer wasn’t immediately returned.
Pipeline owes lenders about $66.6 million including principal of $42.1 million. Cynergy Data LLC is listed as the company’s largest creditor without collateral backing its claims, owed $1.6 million, according to court papers.
The case is In re Pipeline Data Inc., 12-13123, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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