Letsbuyit.com escapes wind-up order
Threatened Letsbuyit.com, the co-operative buying website, has dodged the threat of bankruptcy, at least for another few days.
An Amsterdam court on friday delayed its verdict on the administrator’s application to make the company bankrupt, giving the firm’s management until 0800GMT Thursday 24 January to raise 4m euros to cover the administrator’s costs.
If the firm’s acting chief executive and founder, John Palmer, is successful in meeting this deadline, his team must raise a further 28m euros in two weeks.
Palmer said raising the money would be difficult, more difficult than raising the 40m euros he said he needed to take the company through to profitability. He said the court had granted the firm a reprieve because investors were behind it.
On 29 December, the company’s Dutch operation was granted protection from creditors until 14 March, but this has now effectively been brought forward to 7 February following the administrator’s decision on Wednesday to apply to have all 14 of the firm’s European offices declared bankrupt.
Although the news gives customers some hope that their outstanding orders may be fulfilled, the firm’s UK office had not recommenced taking phone calls by 1500hrs on Friday.
Until Wednesday, customer support staff had told customers awaiting delivery of goods that they would either eventually receive what they had ordered or a full refund.
Rivals, French-owned Dealpartners and the Norwegian CoShopper, have talked to administrators about acquiring parts of the company’s operations, such as its subscriber list, but are not thought to be interested in an outright acquisition.
Letsbuyit management, lead by Palmer, are believed to be looking to raise 40m euros to take the company through to profitability in the last quarter of 2002. The firm’s previous management, which resigned on 3 January, had been trying to raise 80m euros.
Investors have put in 182m euros so far. European rivals have said the firm simply spent too much establishing a pan-European brand too quickly.
Bankruptcy would result in 320 job losses across Europe in what would be the continent’s biggest dotcom collapse.
Links
Resources & Whitepapers
Accounting Software The power of customisation in accounting systems
LetsBuyIt.com files for bankruptcy
Letsbuyit.com shares tumble 68%
UK dot.coms best in Europe – for now