Judge approves foreclosure on DataPlay's assets
By Matt Branaugh, Camera Business Writer
February 13, 2003
A bankruptcy court judge has given DataPlay Inc.'s senior and junior creditors the go-ahead to foreclose on the Boulder company's assets and pursue a liquidation sale.
Judge Donald Cordova made the decision Wednesday morning after hearing arguments from attorneys representing Silicon Valley Bank and Sequel Entrepreneurs Fund II.
Cordova rejected a motion on Friday to sell the company's assets to DPHI Acquisitions Inc., an entity formed to restart the business in Boulder. The judge said the estate didn't prove DPHI's $1.5 million offer matched the value of the assets.
Now, senior creditor Silicon Valley Bank will try to recover $1.06 million, as well as $215,000 in back taxes owed to Boulder County, through liquidation. Sequel hopes such a sale, or combination of sales, will also yield something for junior creditors like itself, which are owed a combined $14.1 million.
"We believe we'll get paid, the taxes will get paid and the junior creditors can get something, too," said Duncan Barber, Silicon Valley Bank's attorney. The sale should happen within the next 60 days, he said.
Bill Almon Jr., DPHI's president, said his group will try to buy the assets again, this time in liquidation.
"We definitely have an interest in it," he said, adding DPHI won't be interested if it can't get both the tiny disc maker's tangible assets and its intellectual property, which took 41/2 years, 240 employees and $135 million in funding to create.
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