I have a fair amount of bankruptcy experience from a past life, so I can shed a bit of light on that possibility.
It would take a minimum of 3 petitioning creditors to file an involuntary in VEND’s case, and you usually want one or two more just in case. It can be difficult to sign up petitioning creditors. It costs money (legal fees), it carries the risk of being sued by the debtor, and it’s not likely to result in financial satisfaction. So, involuntary bankruptcies are relatively rare. When they do happen, it’s often because the creditors are fed up and angry, or they may have concerns that the debtor is being pillaged.
So, while I can see VEND becoming the subject of an involuntary, it’s more likely that the filing will be voluntary. And typically, the voluntary filing doesn’t happen until the debtor is almost out of gas. Well-advised debtors might choose to file sooner, but management often resists. One thing that would accelerate a filing would be the arrival of a deal that is conditioned on a bankruptcy clean-up. As I said, I think the most likely deal would be what’s known as a “363” deal where the assets are sold quickly to a third party.
I think VEND will continue to shop deals until it either finds one or runs out of cash. I cannot imagine anyone wanting to buy into a non-operating company (because, let’s face it-no manufacturing, almost no new sales), and I only suppose that a 363 sale is a possibility if it’s pulled off before the franchisees give up. In either case, a savvy buyer would want this mess to get washed through a bankruptcy. I am sure that Nick and company are dreaming of a recapitalization with new investors (private equity or family office money), but that’s not realistic.
Maybe Nick should get himself a spot on Shark Tank! That would be entertaining!
AI
