AMERICAN TONERSERV TO FILE FOR BANKRUPTCY ?

[Anonymous]

http://www.therecycler.com/news/15061/American-TonerServ-ceases-normal-business-operations.aspx

AMERICAN TONERSERV TO FILE FOR BANKRUPTCY ?
American
TonerServ, an imaging company based in California, filed a form 8-K
with the American Securities and Exchange Commission in Washington DC.
The filing states that it has ceased normal business operations. The
company has been issued with a notice of default and has $673,000 of
principal and accrued interest outstanding.

The filing states:
“Due to the Notice of Default from MTS reported in the Company’s report
on Form 8-K dated December 17, 2010 […] the Company has now ceased
normal business operations.  Management is now considering the future
course of action, which may include requesting protection under the U.S.
bankruptcy laws and/or a liquidation of the Company’s remaining assets.
It adds: “In any event, the Company does not expect to be able to
resume any normal business operations.  It is also unlikely that the
Company’s shareholders would receive anything for their shares in a
bankruptcy proceeding or liquidation.”

David T. Shaver and Clyde
C. Shaver, the former owners of Tonertype of Florida, have stated that
they intend to establish a new business using the Tonertype name and
serving the same customers as the Company’s subsidiary that has operated
under the Tonertype name.

The Company is currently negotiating
with the Tonertype owners concerning inventory, collection of accounts
receivable and other issues related to the business operated by the
Company’s Tonertype subsidiary. However, the Company does not intend to
attempt to continue business operations in that subsidiary.American
TonerServ has been contacted for comment but has not responded at this
time.

http://www.therecycler.com/news/15061/American-TonerServ-ceases-normal-business-operations.aspx

http://www.action-intell.com/2011/01/14/american-tonerserv-may-file-for-bankruptcy/

American TonerServ (ATS) may be headed for bankruptcy.
This
marks a reversal for the Rohnert Park, CA-based toner cartridge
remanufacturer, which was on an acquisition spree back in late 2007
2008, scooping up iPrint Technologies, Image Technology Products,
Mid-America Environmental, Pendl Companies, and Tonertype. In the first
nine months of 2010, ATS had reported record revenue (see press
release), and the firm announced in November that it was averaging 1,500
toner cartridge sales per day, a 50 percent increase compared to
approximately one year ago (see press release). Now, it appears that
ATS’s appetite for acquisition may have been bigger than it could
afford.

On December 30, ATS filed a form 8-K with the Securities
and Exchange Commission (SEC), in which the company said it has ceased
normal business operations. The filing reads, “Management is now
considering the future course of action, which may include requesting
protection under the U.S. bankruptcy laws and/or a liquidation of the
company’s remaining assets. In any event, the company does not expect to
be able to resume any normal business operations. It is also unlikely
that the company’s shareholders would receive anything for their shares
in a bankruptcy proceeding or liquidation.”

A number of events
precipitated the business’s shutdown. According to a December 23 8-K
filing with the SEC, on December 17, ATS received a notice of default
and foreclosure notice from MTS Partners, Inc., formerly known as iPrint
Technologies. It appears that ATS still owes the group $2.4 million in
promissory notes and loans related to the acquisition. MTS was looking
to take back assets such as equipment, customer lists and relationships,
intellectual property, leasehold interests, and contracts and records.
According to ATS’s December 30 8-K filing. “The company does not dispute
the existence of the default or the right of MTS to take over the
collateral securing the company’s obligations.” However, ATS warned,
“The company may pursue other claims that it may have against MTS and
related persons.”

According to the December 30 8-K form, on
December 23, BDS Transitions, LLC, and David T. Shaver and Clyde C.
Shaver, the former owners of Tonertype of Florida, LLC sent ATS a notice
of default for an installment promissory note related to the Tonertype
acquisition. ATS still owed the Tonertype parties approximately $673,000
related to the acquisition.

Finally, on December 28, ATS
received a notice of default and acceleration from Celtic Capital
Corporation on a loan. Celtic Capital indicates the amount of principal
remaining under the loan is $2.1 million, and the creditor is demanding
immediate payment of the principal, accrued interest, fees, and other
expenses.

While MTS is looking to take back assets, the Tonertype
parties are looking to do that and restart operations under their
former name. The December 30 filing states that the notice of default
sent by Tonertype “states that the Tonertype parties intend to take over
a Tonertype website, telephone numbers, and other intellectual
properties.The Tonertype parties also stated that they intend to
establish a new business using the Tonertype name and serving the same
customers as the company’s subsidiary that has operated under the
Tonertype name.”

All this drama goes to show that the merger
mania that has swept through the non-OEM supplies industry can be
dangerous to a company’s financial health. It appears that despite ATS’s
“record revenues” of last year, it simply was not making enough to pay
back what it owed.

http://www.action-intell.com/2011/01/14/american-tonerserv-may-file-for-bankruptcy/

[Author]

January 19, 2011 at 8:40 AM