Judge OKs Wells Fargo Claim on Listworks Assets
The Listworks Corp., Hawthorne, NY, closed Feb. 1 and filed a petition for Chapter 7 bankruptcy relief Feb. 18. The company was founded in 1982, and it reportedly was bought in 2003 by a group of investors and three employees, including Walter Monzi, who was president/CEO at the time of the closure, for more than $5 million.
The stipulation and order was based on a claim by secured creditor Wells Fargo, which is owed more than $3.3 million and which filed a motion for relief from automatic stay with the court March 22. Though the Chapter 7 filing guarantees Listworks an automatic stay from unsecured creditors -- meaning that no lawsuits, foreclosure, garnishments or other collection activities against it are permitted -- secured creditors may file for relief.
According to the document, several loans made to Listworks in December 2002, including a revolving note with a principal balance of $745,522.46 and two term notes with principal balances totaling $1,662,500 as well as interest and fees, are secured funds owed to Wells Fargo that entitle it to all existing Listworks assets. The document defines the assets as including accounts receivable and office furniture and equipment.
Though it is unknown what Listworks' outstanding receivables amount to, its trustee, Eric C. Kurtzman, has been charged with collecting the funds. The document specifies that the trustee not settle any account for less than 80 percent of its book value unless otherwise authorized by Wells Fargo.
As for the other assets, Hardin granted approval March 17 for Listworks' trustee to retain auctioneer Henry A. Leonard & Co. Inc., Englewood, NJ, to sell the company's assets at a public auction. According to the application, assets include office furniture, equipment and a 2001 Ford Taurus, though their worth was not listed.
Based on the document, unsecured creditors have little hope of collecting their money. "[B]ecause of the secured lien held by the Bank, the Trustee's recovery of the maximum amount of the Proceeds is not likely to yield any amounts for payment to unsecured creditors of this estate," it said in part.
It is unclear what claim, if any, the other secured creditors have on Listworks' assets. Other secured creditors are listed as Listwork Holdings Inc., Raleigh, NC, owed more than $1.2 million, and Robert and Gina Givone, who each are owed $113,602.45. Robert Givone was a founder of Listworks.
Unsecured priority claims amount to more than $104,000 and are owed to employees as unpaid wages, commissions and contributions to benefit plans. The list consists of 35 individuals who likely were former Listworks employees.
Documents show the total owed to the more than 400 creditors with unsecured nonpriority claims to be $4,371,446.73.
A creditor meeting was held April 12 and another is scheduled for 11 a.m. May 17, according to a separate court filing.
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters