AssignmentForTheBenefitOfCreditors
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BT planning to write off 2.6 percent stake in troubled OnLive
BT thinks that it's "highly likely" it'll let its 2.6 percent stake in OnLive go to the wall. It told TechRadar that it was keeping a "close eye" on the gaming venture which is restructuring in the face of spiraling debt costs. The telecoms provider has promised that its customers will be able to access the service (for as long as it exists, we guess) and that the investment is a small enough figure that it won't be worrying too much about its balance sheet.
OnLive officially announces asset acquisition, notes that its newly formed company will keep OnLive name
Amid the rumors, sourced reports and statements, it was easy to lose track of the facts surrounding OnLive's recent restructuring efforts. No surprise then, that the newly formed outfit has issued a press release and FAQ (after the break) in hopes will clear things up. First and foremost, the firm reiterates that the streaming game service will continue operating uninterrupted, and that the "newly formed company" that acquired the firm's assets will continue to do business under the OnLive name. The announcement also mentions the Assignment for the Benefit of Creditors (ABC) process OnLive used to settle its debts, noting that "an affiliate" of Lauder Partners, a technology investment firm, was the new OnLive's first investor. Finally, the firm laments the necessity of laying off its staff, stating that "neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction," confirming that nearly half of the previous staff had been offered positions at the new company, and optimistically projecting future hires culled from both previous and new employees. The new OnLive calls the asset acquisition "a heartbreaking transition for everyone involved," but looks optimistically to a future of "transforming the OnLive vision into reality." Check out OnLive's full, official word on the matter below.
OnLive's alternative to bankruptcy: just what is an Assignment for the Benefit of Creditors?
The news is out. OnLive, Inc. is no more, having cut the bulk of its workforce loose and used an Assignment for the Benefit of Creditors (ABC) to absolve itself of massive debts incurred by the expansion of its services without a corresponding increase in its customer base. But what is this alternative to filing for bankruptcy, and why did OnLive choose this particular legal reset button to start over? We spoke with an expert on the matter, Martin Pichinson, co-founder and managing member of Sherwood Partners (which does two or three ABCs in a given week), to help educate us on this little-known tool used by companies irrevocably in the red.
