The Los Angeles-based company this morning announced that it has filed for Chapter 11 bankruptcy protection and sold almost all of its assets to GR Match, an affiliate of direct marketing giant and informercials king Guthy-Renker.
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Equity shareholders will likely not be seeing any liquidities from their securities, however. More on that below.
CyberDefender, which is known for aggressively marketing its MyCleanPC, MaxMySpeed and DoubleMySpeed brands in the United States through television and radio commercials, has set up a dedicated website with information about the “corporation restructuring” process. On it, they explain why they’re giving up:
Q: Why is CyberDefender selling the Company?
A: For some time now, we have been operating under very challenging conditions. We have worked very hard to turn the business around and raise new money to properly fund our operations. Despite these efforts, the improvements in our business have not been enough to make us profitable.
Selling the Company to GR Match, LLC will provide us with access to the resources we need to fund our operations and create a viable future for CyberDefender.
They also explain why current investors are pretty much shit out of luck.
Last October, CyberDefender secured $3.45 million in additional financing and appointed a new CEO, Greg Thomas, for a 12-month period.
The company says it has now filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code to facilitate a sale, and that it intends to continue normal operations during the reorganization process, including continuation of all software, data storage and LiveTech remote tech services for customers.
CyberDefender also says it will continue to provide wages and benefits to its workforce – it has 300 full-time employees according to its website – and honor all post-petition obligations to supplies, vendors and whatnot.
The company has also received a commitment for debtor-in-possession (DIP) financing to the tune of $4.6 million to “facilitate the reorganization and sale”.
CyberDefender says it intends to allow other qualified bidders to submit “higher and better offers” for its assets.
Filing for Chapter 11 bankruptcy to facilitate asset sales is unorthodox, but CyberDefender points out that companies like General Motors, Chrysler Corporation and El Torrito have also done so in the past.