Xdrive files Chapter 11; GeoCities founder makes bid. (Up Front).Xdrive Technologies Inc. has filed for Chapter 11 bankruptcy protection with a prepackaged pre·pack·age tr.v. pre·pack·aged, pre·pack·ag·ing, pre·pack·ag·es To wrap or package (a product) before marketing. Adj. 1. plan to be acquired by one of its former board members, David Bohnett David C. Bohnett (born April 2, 1956 in Chicago Illinois) is a philanthropist and technology entrepreneur. Biography David C. Bohnett is the Chairman of the David Bohnett Foundation,[1] , pending Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. approval. On July 8, Marina del Rey-based Xdrive accepted a $1.2 million offer for its assets from Carolwood Acquisition Corp., a holding company for Bohnett's L.A.-based Baroda Ventures. Three days later, Xdrive filed for bankruptcy, listing assets of $1 million and debts at $4.3 million. Under terms of the offer, $300,000 is earmarked for debtor-in-possession financing Debtor-in-possession financing New debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims. for the online data storage company. "There is no guarantee Carolwood will be the owner," said Jeff Garfinkle, an attorney with Brobeck Phleger & Harrison, who represents Carolwood. The offer is "still subject to being overbid o·ver·bid v. o·ver·bid, o·ver·bid·den or o·ver·bid, o·ver·bid·ding, o·ver·bids v.tr. 1. To outbid (a person) for something, as at an auction. 2. ," he said. A sale must take place by Aug. 30. Bohnett founded Santa Monica-based GeoCities Inc. and sold it to Yahoo! Inc. in 1999 for $3.7 billion in stock. He sits on the boards of locally based Stamps.com, Gamesville.com and Online Partners. Bohnett had no comment. From mid-1999 to end of 2000, Xdrive raised over $120 million from investors including Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. , Soundview Ventures, Softhank, Alex Brown Alex Brown may refer to:
As recently as February, Xdrive had acquired rival storage company FreeDrive Inc. for an undisclosed amount. Xdrive offered its customers the ability to store and retrieve data using the Internet. After launching its free service in 1999, the company grew to more than 9.3 million users after two years and its payroll swelled to 270 employees. Advertising and referral agreements generated $800,000 per month, but that was far short of the $6 million per month in operating costs. The company imposed a fee-based rate structure in May 2001, and hired Karl Klessig as its president, who began to slash costs. But customers were reluctant to pay for services they could get on sites like MSN's Hotmail or on Yahoo. Subscribers fell to 12,000. In January, Xdrive began soliciting new investment and also began considering selling the company. In June, its board solicited bids from six companies, including ResponseBase, JLT JLT Journal of Lie Theory JLT Jardine Lloyd Thompson Group PLC JLT Junior Leader Training (Boy Scouts of America) JLT Just Like That JLT Junior League of Toronto JLT Junior League of Tulsa JLT Junior League of Tampa , Big Vault and Bohnett's Carolwood. Xdrive's bankruptcy attorney, Scott Clarkson of Clarkson Gore & Marsella, said the company would continue to operate. "Service will improve and the customer base will expand, because they won't have debt pressure to contend with," he said. |
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