Amp'd Mobile, Inc. Files Chapter 11 Petition
On June 1, 2007, Amp’d Mobile, Inc. filed a voluntary petition for relief under Chapter 11 in the United States Bankruptcy Court for the District of Delaware. Judge Brendan Linehan Shannon has been assigned to the case.
Amp’d, a provider of mobile phone and entertainment services, proposes to continue to operate out of cash collateral while continuing to seek debtor-in-possession financing. On June 5, 2007, Judge Shannon approved the debtor’s cash collateral motion on an interim basis, pending a final hearing on June 20, 2007.
According to the debtor’s affidavit in support of its first day motions, Amp’d purchases wireless network access from Verizon Wireless, which it then resells to its subscribers on a retail basis. The debtor attributes the filing of the petition to unprecedented recent growth, and collection and credit problems with some of these new subscribers, which ultimately created a liquidity crisis. According to the affidavit, some 80,000 Amp’d customers were identified as being likely to be non-paying customers. Against this background, the debtor unsuccessfully worked to raise additional investment funds from existing investors. Finally, on June 1, 2007, Verizon Wireless sent a purported termination notice to Amp’d, precipitating the filing of the bankruptcy petition.
