Friday, September 07, 2012
Vivaro Corporation, the parent company for STI, filed a voluntary chapter 11 bankruptcy petition this past past week in the NYC bankruptcy court for all of it's telecom related units including: Kare Distribution Inc, STI CC 1, LLC, STI CC 2, LLC, STI Telecom, Inc, STI Prepaid, LLC and TNW Communications.
Reason for Filling
Vivaro's revenues' have dropped by over 40% since 2010 and their total liabilities are double that of their current assets. Their cash flow situation is what forced them to finally to file for chapter 11 protection having slightly less than $150,000 in cash
Who they Owe the Most?
Sprint - $4.5 million dollars
Telecommunication Relay Service - $2.7 million dollars
Telecom Italia Sparkle - $2 million dollars
Verizon - $1.9 million dollars
Level 3 - $1.3 million dollars
How Many Phone Cards are Currently on the Street?
According to the bankruptcy filing, they have about 22 million unused active cards currently on the market representing about $31.2 million face value dollars.
What are Some of their Card Brands?
Digame, Mi Carnal, STI Family, El Chavo, Eroika, STI Edge, and Clarito
How Many Employees Jobs are Currently at Risk?
In total all of the companies listed above has a total of 231 full time employees & 64 part time employees.
It is important to note that chapter 11 does not mean the company is closing down, it just means that they are trying to seek temporary relief from creditors so that they can restructure and hopefully emerge more stable. However, the odds seem to be against Vivaro since most telco's in this position usually end up going to chapter 7 (bankruptcy) within weeks or months. Vivaro has made it clear that they need more time and absolutely cannot have their big creditors shut them down as they need to be able to honor all of the cards currently on the street as failure to continue to provide service for these cards will make a recovery all but impossible. There is a hearing on the motion is scheduled for September 10th.
Stay tuned for updates...