November 07, 2024
Business

Creditors sue former suitor for EnvisioNet

BANGOR – Creditors of the former EnvisioNet Computer Services Inc. are suing a California company that promised to buy the Brunswick-based technical support business but failed to close the deal.

EnvisioNet filed for Chapter 11 bankruptcy protection in June 2001, and that proceeding continues almost two years after the company’s assets – but not its operations – were sold.

On Monday, the bankrupt estate’s unsecured creditors’ committee filed the lawsuit against Alorica of Chino, Calif., stating that its failure to complete the sale caused EnvisioNet’s financial value to drop and deprived the committee of money it could be paid.

The committee is seeking “an amount sufficient to compensate for all losses” to EnvisioNet’s estate.

“As a result of Alorica’s failure to close, the EnvisioNet estate received substantially less revenue from the sale that it would have had Alorica honored its obligations,” wrote Robert Keach, a Portland attorney representing the unsecured creditors’ committee, in the lawsuit.

Alorica was selected by a U.S. Bankruptcy Court judge to be the buyer of EnvisioNet’s assets after an 11-hour auction on Aug. 20, 2001. Alorica had until Aug. 22 to complete the $11.8 million sale or it would be called off and the other suitor during the auction, Microdyne Outsourcing Inc. of Torrance, Calif., could go to court and ask to be named the buyer. By Aug. 27, 2001, Alorica still had not signed a contract, and the next day the bankruptcy judge named Microdyne as EnvisioNet’s buyer at a purchase price that was $1.2 million less than what Alorica agreed to pay.

Michael Pearce, a Portland attorney representing Alorica, did not return a telephone call for comment Tuesday.

EnvisioNet, once the model for what was supposed to be a growing high-tech industry in Maine, filed for Chapter 11 bankruptcy protection in June 2001. The previous month, the company lost one of its major clients, and started to lay off more than half of its 2,000-person staff in its Biddeford, Augusta and Orono locations.

More than a year ago, EnvisioNet’s founder, Heather Blease of Biddeford, along with seven other shareholders, was sued by the unsecured creditors’ committee for allegedly mismanaging the finances of the company.

That case is pending. One of the shareholders, Michael A. Liberty, reached a $2 million settlement with the committee in March, and the bankruptcy judge approved the deal in late May.

Earlier this year, Blease filed for personal bankruptcy protection.

The proceeding is ongoing.

Correction: An article in some editions on Wednesday’s Business Page about EnvisioNet Computer Services Inc. gave the incorrect location of its former headquarters. It was Brunswick and not Biddeford.

Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like