List management and brokerage firm The Listworks Corp., Hawthorne, NY, is rumored to have ceased operations Tuesday afternoon and may be filing for bankruptcy, according to several industry sources.
The company’s telephone was being answered by an automated system late yesterday, and callers were instructed to leave messages in a general mailbox. The company’s Web site, www.listworks.com, was still working as of yesterday.
DM News was unable to obtain a bankruptcy filing yesterday, but the buzz among list professionals was that Listworks would file Chapter 7, meaning that non-exempt property would be sold and proceeds would go to its creditors, which would include other list management companies.
In 2003, it was reported that Listworks was purchased by a group of investors and three employees, including current president/CEO Walter Monzi.
On Jan. 24, two Listworks employees, Lisa Greene and Frank Quaranta, left the company to open Specialized Fundraising Services Inc., Spartanburg, SC. Quaranta and Greene are brother and sister with more than 17 and 20 years in the industry, respectively. Quaranta said Greene’s clients under Listworks are now SFS’ clients.
“[Greene’s] clientele has followed her every single time, so when Lisa chose to go into business for herself, her clients chose to go with her,” Quaranta said. “Listworks’ South Carolina office was basically operating as an independent subsidiary of Listworks.”
Greene is president/CEO of the new firm while Quaranta serves as executive vice president/chief operating officer.
Quaranta said he and Greene did not foresee a demise for Listworks when they announced their new company.
“If there was any financial impact of us leaving it wouldn’t have been felt for at least 90 days,” he said.
Though Listworks’ managed list properties were handled in its New York office, SFS said yesterday that it has assumed list management of most of Listworks’ nonprofit clients’ files. It is not known what the non-fundraising clients are doing about list management at this point.
SFS now has more than 50 clients, including the American Diabetes Association, Muscular Dystrophy Association, American Lung Association and American Breast Cancer Foundation.
Regarding money owed to list owners by Listworks, Quaranta said his company hasn’t been affected yet. He also said SFS has not been asked for a single prepay and has had to guarantee only about 40 out of 1,100 orders it has processed so far.
“I don’t know how it’s worked in the cases of Kleid, Greenfield Direct or Alan Drey, but as long as you can provide some type of documentation that you paid Listworks for their services, those funds shouldn’t be in question,” he said. “Whether they actually get disbursed is another thing, but you have fulfilled your obligation. You have paid legitimately the organization who is an agent, and it’s not their money.”
It is unknown how much money, if any, Listworks owes and to what firms. In the early 1990s, Greenfield Direct Response closed shop, leaving many in the lurch. In 1998, Kleid Co.’s bankruptcy filing raised widespread questions about its handling of rental income owed to list owners. Alan Drey Co. filed for bankruptcy in 2002.
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