News for 'CYDE' - (DJ CyberDefender Files For Chapter 11 With Purchase Offer From Lender)
By Stephanie Gleason
Of DOW JONES DAILY BANKRUPTCY REVIEW
Consumer technical support company CyberDefender Corp. (CYDE) filed for Chapter 11 bankruptcy Thursda! y with a prepackaged plan, blaming the economy and a botched audit months after it went public in June 2010.
In documents filed with the U.S. Bankruptcy Court in Wilmington, Del., the Los Angeles company said it's suffered operating losses due to the general state of the economy--it had a net loss of $17.6 million between January and September 2011. To combat losses and raise capital, the company put together a public offering in August 2010. Days before the offering, CyberDefender said it found out its auditor was being sanctioned by the U.S. Securities and Exchange Commission and couldn't perform the audit.
The situation "led to significant delay in timing on the company's ability to come to market and decreased share price," it said. Other efforts to raise capital on the public market since "were ultimately unfruitful," it said.
CyberDefender filed for bankruptcy with a plan to auction its assets and have its senior lender,! an affiliate of Guthy-Renker Partners Inc., kick off the auction with a $12 million bid, which includes $4.6 million in bankruptcy financing and loan forgiveness, plus $250,000 in cash.
The company, burdened by $42.5 million in debt and only $8 million in assets, is asking the bankruptcy court to approve a May 3 auction and to schedule a sale hearing for May 4.
CyberDefender offers a subscription service in which it can remotely access a customer's computer to fix technical problems ranging from computer crashes to new device setup. It also sells antivirus software, online data backup and software that "cleans up" a PC computer so it can run more quickly. It has 677,000 subscribers to its services and has 322 full-time employees.
The stock opened at 13 cents a share on Thursday and had fallen to nine cents by midday. CyberDefender had 28.9 million shares outstanding at the time of its filing.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those und! er bankruptcy protection.)
-Stephanie Gleason, Dow Jones Daily Bankruptcy Review; 202-862-1347; stephanie.gleason@dowjones.com
(END) Dow Jones Newswires
February 23, 2012 12:02 ET (17:02 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.- - 12 02 PM EST 02-23-12
