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Amp’d Mobile Files Chapter 11 Bankruptcy; Hopes To Restructure, With Funding In Place

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Update: it has filed…see this follow-up post.
Amp’d Mobile, the content-heavy MVNO which has had close to $360 million pumped into it over the last two years, will be filing has filed for Chapter 11 bankruptcy in the Delaware bankruptcy court, has learned through sources, in hopes to restructure the company and the board. This comes after a protracted board fight over the future direction and additional funding of the company in which MTV Networks and Universal Music Group have investment, besides other VC and private equity firms. From what we know, the company has the funding in place to take it out of bankruptcy court quickly, and continue the operations. Not sure whether the current management structure will stay in place. We will have more as we find out more.

For our full coverage on the Amp’d drama, read our dedicated section.

37 Responses to “Amp’d Mobile Files Chapter 11 Bankruptcy; Hopes To Restructure, With Funding In Place”

  1. hello i am on board for a class action law suit, ampd mobile shut my phone off saying i owed them 350.00 in april now in august i owe them 928.00 with a collection agency for pinnacle finanical group with no proof of a balance and no phone numbers to contact anyone have an idea

  2. Well am one of the fortunate ones, i didnt pay ampd bills at all, still they gave me service i owe them $800, am so happy they are bankcrupt, i save $800 yay me lol it was a bad service, for me free doe, anything for free is ssweet

  3. Gerry Storm

    Class action lawsuit ……Please……! they need to pay for their horrible misuse of public confidence and should be held accountable to the standards set forth by our gov't as well as all the other providers of this service.

  4. Jona Lloyd

    I too had ampd mobile. I paid my bills on time and have excellent credit. I want to know the same thing that Rafel wants to know. What happends to people like us that owe a bill, but can not pay it and besides my phone broke about 6 months ago and I have been trying to get them to replace it for that long with no response. Finally I requested that they turn off my service and let me buy out my contract and I was mysteriously disconnected. Now I'm left with a large bill with no service to a broken phone and I care about my credit. Will this be a mark against my credit or what will happen. If you can help me please answer. Thanks.

  5. Lets start by organizing a class action law suite on the grounds of breach of contract, and defimation of character ( I was one of meny who payed their bill on time). Is there any law ferms out their? Then how about putting some political pressure on our representitives?? I find it alarming that only 20 of the largest creditors and there amount of claims are listed in the bankrupcy fillings. How about my cell phone I can no longer use. Do I have to pay my last phone bill??.

  6. roberta

    I am in the Army stationed in Korea. I purchased a amp'd phone in Jan 07 so that I could keep in contact with my family back home. The phone worked for exactly 4 days. I have tried to work out the non-service with amp'd to no avail. My bill was supposed to be $119 per month but instead amp'd took $130.00 from my account each month and didn't care about the fact that I wasn't receiving service. I'm fighthing to protect my country and this company is allowed to cheat me out of my hard earned dollars. I would like to file a class action suite. I will seek leagle councel. I can't believe that it's leagle to take customer's money and not provide a service.

  7. rafael

    could anyone help me out???? I'm an ampd mobile subscriber and I have two different lines on the same account. We both have those slider phones. I have the black jet and my girlfriend's got the white angel. They both broke a month ago and we've been calling so we could get a new and i haven't got any answers then i thought it would be easier for me to go to the place where i got them. so i did, then the guy told us that they didn't have any on stock that he couldn't do anything about it. plus, he also told us that they were having some issues with the company, so they were gonna cancel their contract.. so there was nothing we could do about it. now it's been more than a month and our phones are broken. so my question is, what's gonna happen to my service???? because i got a text message saying that it was gonna be diconnected and so did my girlfriend.. and also simce they are going on bunkruptcy, do i still have to pay my monthly bills? even though they are giving me a really crappy service????? or what should i do? i was also thinking in cancelling my contract but if i do that, i have to pay 350 for the cancellation what should i do???

  8. i worked in a store that is a retailer for ampd mobile as well as alltel and tmobile. ampd was letting just about anyone sign up for contract service. we would run a credit check on all three carriers. alltel would come back $1000 dep, tmobile would be t-class credit so it would take about $300+ to sign up, but it would never fail that ampd would always come backed approved for two lines and then these same customers would churn within 60days. so what angela is saying is prolly part of the problem but definitely not the source of it all. plus, the kyocera slider phones were crap. about 50% of the slider phones we sold came back into the store or we had to send off for insurance purposes. we lost a lot of money on those phones so i'm sure ampd did as well.

  9. Angela

    Ya know if ampd customers would pay thier bills, ampd would be filing for bankrupt, think if 1000 people had ampd and only 3 of them paid thier bills, ampd isnt getting paid so imagine that with over 200,000 people when only a 3rd is paying thier bill, its insane.

  10. Banker

    If they can manage to get there act together I think they'll be fine. Remember, its chapter 11 not chapter 7. They already have the funds lined up if they can make it through this bankrupcy. Word on the street is they just signed a deal with Cellairis Mobile Entertaiment – AKA Global Cellular to roll out there Mall Based "kiosk" program. Cellairis already has over 400 locations in the US and has the relationships with all of the Mall Mngt Groups. This is the key to success. Amp'd was spending too much time with "traditional" service providers and not opening enough "Exclusive" Amp'd stores. this partnership could be a new life for Amp'd. The brand is good, the product is good, they just did not have the right retail distribution. Lets see what happens????

  11. Sr.QA Eningeer III

    I was offered a job there once in the QA dept, and they told me that i had to go to Best Buy and try to sell their product. When you apply to company and they tell you you need to sell it at Best Buy where they are selling their product, and you didn't even apply for the sales dept; DONT WORK THERE!

    It all equates to bad management.

    BTW Helio is next!!!

  12. Arsenio Hall

    $360m and then a Chapter 11? Not even a venal IPO offering between the two events? Mr. V.C.'s: was anyone minding the store here? What sort of board lets a company get into this sort of shit? Hmm, wait, of course…there's always Motricity, mobiTV, Sling Media….batter up!

  13. Mocorocker

    Seriously who did NOT see this coming? It was just a matter of time. When they released last year that they had burned millions and all they had to show for it was 7,000 customers, it was time to turn the lights off and go home.

    BTW, isn't this Adderton guy who told the others "you are not carriers, you are media companies" or something of the sort?


  14. First ESPN, now Amp'd. Major blows and setbacks for the high profile MVNOs. Makes you wonder if the mobile ecosystem can allow for so many MVNOs to survive. I predict more consolidation and a few more casualties along the way. I'm sure Boost, Disney, Helio and Virgin Mobile are studying any and all public documents about Amp'd so they do not share the same fate. This is also a wake up call for the US market to see what can reasonably be sustained in terms of the number of mobile operators to service mobile subscribers.

  15. If you ever were in the building for any extended period of time, you'd have quickly picked up the sketchy vibe. It's a shame because a lot of talented people have worked for Amp'd, and they deserved better. For all the buckets of cash the place got, you'd never have known it. Helio spent a fortune on advertising; in the months leading up to its launch you couldn't walk three blocks in LA without seeing a dozen billboards. Pre-launch, Amp'd did, what, a couple posters stapled up by a street team? And post launch, Helio's kept up the pressure while Amp'd has seemed content to stick with that killer billboard spot facing NORTH on Bundy… for whose benefit, employees?

    Couple that with a series of johnny-come-lately phones that underwhelm in the extreme, content that can be had for free on YouTube or Break, and you've got a winning model.

    So much sketchiness, I've only got the outsider's view at this point.

    Oh well, guess those ultra-dope vehicle wraps and the Amp'd Party Bus or whatever the hell it is really have paid off in spades.

  16. stetson

    Lots of accusations and law suits are going to come of this but the real question is despite all the billing issues and other mismanagement and lack of executive talent is there actually a sustainable business model around delivering new media and content with a highly branded MVNO? Or was the unwritten business model at Amp'd to get as many subscribers as fast as possible and show ("create"?) high data ARPU's and validation that people were willing to pay to watch original content and other services and then flip the company to Viacom or some other big media company (or back to Verizon)as quick as possible and let them tidy up the ultimate mess? Just like Helio's unwritten business plan quite possibly was to design a logo and initial handsets that looked remarkeably "Apple-ish" in the hope that it would be picked up as Apples mobile service (not happening). Remember its easy to get subscribers. You can give away phones to anyone and count them as a sub. The hard part is actually getting them to pay and buy the content you are spending millions on creating. The reality of running a sustainable business has caught up to Amp'd before the dreams of being bought out in the current digital media buy out frenzy were realized.

  17. Hi,

    this shows that the MVNO model can work only if you can keep a low cost structure, have a captive audience, and a distribution network already in place.

    An example would be a national supermarket chain launching a branded no-frills MVNO. Distribution and payment channels already there, an existing relationship with the audience, a target market who´s not already bombarded with dozens of different offers on the same tone.

    Now, an high-end MVNO based on content has to compete with all the traditional carriers, and several other MVNO wannabies. And the carriers are not gonna let the ground of content and VAS services to a competitor, after all the investment in fancy networks and the seen the impact of the decreasing voice ARPU. Really tough nut to crack, IMHO.

    It´s a pity, because it could have led to inveresting and innovative things.


  18. Joe Mobile

    John – do you know anything about the mobile world? Helio loses money on every Ocean they sell. It's called "subsidy." Only Pantech is making cash (maybe). Oh, you mean you thought Helio was making those things?!?!

  19. Busta Co

    Bo, go back and get your GED you racist, runny, beetle excretion.

    Peter did raise the money and as CEO he'll take the bullet but it takes a lot of screw ups to burn through that dough. My guess is too many buddies and friends who don't know wtf they're doing coupled with a lot of really bad business analysis. Good product, horrible service. 'Nuff said.

  20. Bo Titan

    Adderton has to be one of the worst CEOs ever! He raises 360 million and files chapter 11 in less than 2 years. Peter time to go back down under. You always full of alot of hot air. Next profession Scuba Instructor. Just watch to the air supply gauge.

  21. Kristina

    Horrible mismanagement that frittered away a fortune in investors' money on stupid content and God-only-knows what else. From its inception, Amp'd failed to pay its bills, and now it promises to secure more investment capital during Chapter 11 reorganization and reform from its past transgressions. I see Chapter 7 looming large.