iBill’s Financial Woes Continue; Millions in Assets Seized
According to IBD’s SEC filing, a public auction was held on Aug. 13, after note holders foreclosed upon collateral securing notes they held. The securing notes were collateralized by IBD’s collection of cel art. According to IBD’s filing, the collection was valued at $6.5 million.
Two days after the auction, IBD received notice that CMI II, LLC, an affiliate of Castlerigg Master Investments Ltd. and an IBD stockholder, had been granted a judgment of $7 million against IBD.
In its SEC filing, IBD states that the company’s strategy “had been to maintain passive investments but to discontinue all operations associated with the adult entertainment industry,” and that it had “intended to seek business opportunities through a business combination with one or more private companies, which would have been promoted and restored to sustained profitability,” but said the recent setbacks have changed that plan.
“[I]n light of the recent judgment against it by CMI, the company has ceased operations,” IBD stated in the filing. “The company has had no material operations since June 2006.”
The SEC filing updated the status of debts owed to iBill’s adult webmaster clients, stating that the company as of June 30, had an “outstanding balance of $4.9 million and accrued unpaid interest of $288,000 on client notes.”
Over the last several years, IBD has cut several deals in an attempt to revive the company and to reestablish its financial viability, including the outsourcing of payment processing operations to Etelgate in March 2006.
The deal with Etelgate, however, broke down due to a “dispute concerning processing volume,” according to IBD’s SEC filing, a dispute that arose just a few months after the deal was struck. By December 2006, the deal with Etelgate had been entirely abandoned, and iBill’s operations were discontinued.
In December 2006, IBD announced its plan to exit the credit card processing space and discontinue the operations of iBill. According to the company’s SEC filing, IBD “intended to sell [iBill] along with any of its associated intellectual property rights, the customer database and the assumption of all remaining outstanding debt obligations,” adding that “[t]o date, no such sale has materialized.”