Engage is now DisEngaged
Files for Chapter 11
Engage, the once high-flying ad serving software and Internet sales house, has gone titsup. It has filed for Chapter 11 and is selling all of its assets to a firm called Scene 7 for the knockdown price of $1.2m cash and the assumption of liabilities of approx. $650,000 to $850,000.
This is subject to bankruptcy court approval and of course another, better offer could always come along. But how much is an Internet sales and promo house worth?
In a statement today Engage says that shareholders are unlikely to see "any recovery". But there's enough money in accounts receivables to pay "its post-petition trade and employee obligations, as well as the Company's ongoing operating needs during the restructuring process".
CMGI, the onetime dotcomglomerate, a secured lender and former owner of Engage, has "agreed to a carve-out from its collateral to make funds available to unsecured creditors". How forgiving. In September last year, CMGI cancelled $40m of debt in Engage and return all its shares in the company. In return, the newly independent Engage was to conduct a $6m earn out payment, starting in 2004.
Engage Inc used to be big in ad-serving software, but this technology was bought by its founding management team in November 2002. This business is now called Accipiter. ®