Impower Inc. has been given permission by a bankruptcy judge to continue doing business. The company filed for Chapter 11 bankruptcy protection on Aug. 3.
“The court approved our cash-collateral motion,” said Greg Ellis, Impower’s president and COO. “We are absolutely in business.”
The hearing Friday at the U.S. Bankruptcy Court in New Jersey was to decide whether Impower would continue in business while reorganizing itself under Chapter 11. The court’s decision to allow Impower to move forward means that creditors who were owed money before the bankruptcy filing on Aug. 3 will not be paid until settlement arrangements have been made. Those who are owed money for services after Aug. 3 will be paid, Ellis said.
“All lot of our vendors are willing to work with us on a go-forward basis, recognizing that our success through Chapter 11 offers them the best opportunity for settlement regarding pre-petition claims,” Ellis said. “We are absolutely convinced that it’s in the best interest of all our creditors for us to successfully reorganize and emerge from Chapter 11.”
Funding to move forward comes from the $8 million Impower has in net accounts receivable, some cash and an offer from private equity firm Counsel Corp., Toronto, to provide debtor-in-possession financing, Ellis said. Impower has not drawn on that offer.
Ellis said there are about 30 employees remaining after another 30 had been slashed in a series of layoffs since May. Ellis said Impower can operate with half the staff because “if you look at where the bulk of revenue was coming from, it was coming from the San Francisco and Peterborough, NH offices and both of those are essentially intact.”
San Francisco handles interactive marketing services such as e-mail list brokerage, e-mail append programs and CPA Web advertising deals. ImpowerBase, the e-mail database division, and ImpowerMail, an e-mail service bureau, operate from Peterborough.
The Stamford office, which had handled postal and e-mail list brokerage, has closed. Several services that had been conducted from the Princeton, NJ headquarters have ceased. They include marketing, creative, IT and an account services.
No clients have yet left Impower, according to Ellis. “We’ve worked closely with clients and kept them informed,” he said. “All the feedback so far has been very supportive. I believe that our clients are testing us in real time. As long as we demonstrate that we are fully able to execute our client programs, then I believe our clients will stay with us.”
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