Eziba Creditors Take ActionCreditors have forced multichannel marketer Eziba into bankruptcy liquidation, according to a report in The Republican, a newspaper that covers western Massachusetts.
A trustee charged with selling the company's assets was named by the U.S. Bankruptcy Court on Friday, the report said. Eziba, North Adams, MA, suspended all operations last month.
The company began as a Web site, eZiba.com, in 1999, specializing in artifacts acquired from local artisans worldwide. It quickly branched into catalogs and brick-and-mortar stores and appeared to be doing well even after it had to refinance when snow collapsed the roof of a shipping warehouse.
But in January, local newspapers reported the company was in a cash crunch and that layoffs were imminent. Eziba said its difficulties began with a mistake in its fall catalog mailing, which was sent to a list of infrequent buyers instead of frequent buyers.
When Eziba suspended operations, it said it would quickly return as an online and retail business but had no plans to return to mailing catalogs. It had filed for liquidation under state law that allows creditors to be paid by an assignee who takes control of all assets.
The assignee, lawyer Joseph B. Collins of Springfield, MA, said that in December, "a series of preferential transfers" occurred at Eziba, according to The Republican. While Collins declined comment on the nature of the transfers, after learning of them he thought federal bankruptcy would better serve creditors.
Collins also said a substantial offer for the assets of Eziba has been received, according to the report in The Republican.
The creditors who forced the company into bankruptcy are catalog printer Arandell Corp., which said it is owed $230,000; media relations company Ruder Finn Inc., owed $11,155; and Clientlogic Operating Corp., owed $127,600 for customer management services.