Mobile Content Distribution Firm Oasys Files For Chapter 11 Bankruptcy; Gets Bought By Creditors

This was bound to happen as we got tips left, right and center on the inevitability of this over the last month or so: Raleigh, North Carolina-based mobile distribution company Oasys Mobile has filed for Chapter 11 bankruptcy protection. This comes after it started considering its strategic options earlier this year, then two board members for the company resigned earlier this month, and then the company was in default of $8.84 million in loans and interest to two of its lenders that it was supposed to pay by June 30th.

The OTC-traded Oasys has agreed to sell all of the company’s equity to Associated Partners and Rock Hill Partners, the two investment firms to which it owned the money, reports BizJournals. Essentially, Associated and Rock Hill will take over ownership of Oasys in exchange for canceling the company’s debt with them. The two have agreed to fund Oasys’ operations (though a $2.66 million debtor-in-possession loan) as the company moves through bankruptcy. The company said it could exit Chapter 11 as soon as October, and in the meantime, business will continue as usual. More details in release here.

AP: In its Chapter 11 petition, Oasys listed assets of about $2.12 million and debts of about $11.5 million. JDS Capital Management was listed as the company’s largest shareholder, holding 1,821,450 shares, or 19.03 percent. Other holders of more than 5 percent of the company’s equity are: Empire Capital LP, 13.25 percent; Donald D. Hammett, 6.91 percent; and investor J. Winder Hughes’ Focus Fund, 5.32 percent. Among those holding the largest unsecured claims against the company are Mattel Inc., a $468,842 claim for license royalties; Provident Advertising and Marketing Inc., $168,382 for license royalties; and Sony BMG Music Entertainment, $140,000 for license royalties.

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