'Stalking horse' targets Axium
Ex-president plans bid on bankrupt biz, trustee saysBankrupt payroll services company Axium International might be sold by the end of next week.
Ruben Rodriquez, former president of Axium International, is the stalking-horse bidder on Axium's entertainment business with a bid of $2.5 million, according to court-appointed trustee Howard Ehrenberg.
Ehrenberg expects sales procedures to be presented for approval during a court hearing Thursday, followed by a sale one week later.
"So the Axium International side of the company should be sold by the end of next week," said Ehrenberg, a partner at SulmeyerKupetz in Los Angeles.
Meanwhile, Ensemble Chimes Global, the staffing arm of Axium, is scheduled to be sold at auction Wednesday in federal bankruptcy court in Los Angeles. The bidding is expected to begin at $7.5 million, with the next bid required to be at least $675,000 more, followed by additional bidding increments of $25,000.
Barry Olson, founder and former president of Chimes, is expected to submit the stalking-horse bid in conjunction with Vedior North America.
ECG was sold to Axium in February for $80 million, Ehrenberg said. Assets included in the auction are ECG's proprietary software program known as RightsMax, which manages licensing agreements for intellectual properties, including film, video and DVD, as well as related intellectual property, customer contracts and property leases.
Axium filed for liquidation this month under Chapter 7 of the U.S. Bankruptcy Code. Among the extensive repercussions, employees were left with paychecks that they could not cash and companies were left with funds in accounts that were frozen.
Ehrenberg explained that under the order of priority within the bankruptcy code, "certain items like wages and taxes and benefits would have priority over general trade debt. But at this point it's very premature to have any way to anticipate if there is going to be, in fact, funds available to make payments to creditors."
To date, only two creditor claims have been filed by employees -- one seeking past wages and the other seeking vacation pay.
On Jan. 15, GoldenTree Asset Management, the primary lender to Axium International, and GTAM Special Reality filed suit against Axium's former chairman and CEO John Visconti, vice chair and COO Ronald Garber and others, claiming that they looted the assets of Axium to fund their "extravagant lifestyles."
In papers filed in U.S. District Court, GoldenTree claims at least $87.5 million in damages. Ehrenberg said he will oversee the investigation into the lawsuit's allegations.