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Summary:

Verizon played a key role in Amp’d Mobile’s decision to file for bankruptcy late Friday — and the timing, according to an affidavit by Bill…

Verizon played a key role in Amp’d Mobile’s decision to file for bankruptcy late Friday — and the timing, according to an affidavit by Bill Stone, president of Amp’d Mobile, filed Monday in federal bankruptcy court in Delaware. The affidavit is meant to support various motions that would allow the company to continue operating without interruption. Keep in mind: this is the Amp’d side of the story.

Stone’s sworn affidavit proffers an outline of events that show a company growing too fast in too short a time without the right systems in place. After a growth spurt in late 2006 and early 2007, Amp’d wound up with a large number of new subs — the sub total hit 100,000 by the end of 2006 — and, within months, an equally high number of non-paying customers (approaching 80,000 by late May) leading to what Stone describes as a “liquidity crisis.” That problem led to fund-raising efforts in May that “appeared to be successful” even as late as June 1, the day the company filed for bankruptcy. But, Stone adds: “Unfortunately, the Debtor’s existing investors ultimately declined to further fund the business.”

While that was ongoing, Amp’d’s network carrier Verizon — listed as the top creditor with $33 million owed — declared default on its wholesale agreement May 22 and gave Amp’d 10 days to make a $4.5 million payment. Unable to pay, the board agreed to file bankruptcy June 1. (For context, the filing doesn’t say but that payment was a little above 1 percent of the total funding and financing the company had raised.)

That’s when Verizon, according to Stone, made a move “in direct contravention” of the wholesale agreement and the default notice, sending a letter the evening of June 1″‘purporting to terminate the wholesale agreement effective immediately'” and asserting the right to shut off service to Amp’d customers. Amp’d will ask the court to make sure the agreement remains in force and that service continues.

The first hearing is Tuesday at 2 p.m. in Wilmington; U.S. Bankruptcy Judge Brendan Shannon has been assigned the case.

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  1. LOL – they don't even have $4.5 million left ?

    Great for Verizon, in the end they will take over the customers.

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  2. Staci D. Kramer Tuesday, June 5, 2007

    They might have had $4.5 million left but if they paid that amount they might be uncertain about meeting other obligations like payroll, etc.

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  3. Amp'd must think we have our heads up our "backend infrastructure" to believe that customer demand created this "liquidity crisis." The truth is that Amp'd squandered hundreds of millions in investor's money on partying it up with celebs, then turned around and flipped-off its creditors, employees and investors by filing Chapter 11. Poor planning, horrible management and zero accountability have created the disaster that has covertly been Amp'd's modus operandi since its inception.

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  4. Amp'd is DEN (Digital Entertainment Network) 2.0… anyone that led the Amp'd investment for their respective funds should be fired. Adderton was fired from Boost… reason.. he is a marketing wank.. thats it.. nothing more.

    Helio is next.

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  5. Dick Cheney Tuesday, June 5, 2007

    Can anyone tell me how these rocket scientists on the board and management allowed Amp'd to get into a situation where cash burn rate pushed a company so quickly into Chapter 11? A high school accounting student could have seen that train coming six months out…this is pathetic and reflects willful malignant neglect or just plain stupidity. Jeffrey Skilling, you are not forgotten…

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  6. Its not surprising, the powers to-be at VZW would like nothing more than to kick these guys to the curb. VZw will leave no "Stone" (pardon the pun) un-turned in trying to terminate its agreement with Amp'd

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  7. Peter Frameington Saturday, June 9, 2007

    Guys, my name is Peter as well so lets make sure all Peters are not lumped in with the amp'd Peter Pan. What a putz.. How do you get 80,000 customers that don't pay? Sure blame the customers, that is if there really were that many customers. Smells like World Com and Bernie. Ya think we could cut jail costs by putting Adderton and Stone in the same cell? Is the down under ponzi queen still at amp'd or has he fled the country?

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  8. I signed up in 06, I didn't get a bill, no tech support, phone was crap, downloads took forever, no info on website so the phone went out the window around Jan. somewhere between Denver and Boulder. I guess I was to blame for your ugly baby going in the crapper Stone. You fooled me and everyone else.

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  9. the service did suck, and robert… your just another useless customer, that doesnt recieve a bill and feel that the sevice free. Not making the slightest bit attempt to contact the company and ask them to correct your billing problem. And when a 3-4 mont bill comes they start cying, and blaming it on the company even though you used the service comfortably for said amount of time.

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