Pareteum gets court approval of bid procedures, stalking horse deal

By Sarah Lizee

Olympia, Wash., June 1 – Pareteum Corp. received court approval of the bid procedures and a stalking horse agreement for its assets, according to an order filed late Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, before filing Chapter 11, the company’s board of directors and management evaluated strategic alternatives and implemented an asset sale strategy.

Circles MVNE Pte. Ltd. has combined with Channel Ventures Group, LLC for a stalking horse asset purchase agreement for substantially all of the assets of the company.

Circles has agreed to acquire the company’s mobile virtual network enabler business and associated contracts, and Channel Ventures has agreed to acquire the company’s mobile virtual network operator, interactive digital media, iPass, and small and medium business enterprise businesses and associated contracts.

Consideration for the sale is a credit bid against about $60 million in secured claims under prepetition loans and proposed debtor-in-possession loan held by the stalking horse bidders.

On May 30, the official committee of unsecured creditors filed a limited objection to the bid procedures based on concerns over the stalking horse bid, particularly the credit bid amount and the bid protections, among other things.

The proposed stalking horse agreement included a $1.5 million expense reimbursement and a 1.9% breakup fee. While the court approved the expense reimbursement, the breakup fee was not approved.

Under the approved bid procedures filed with the court, the bid deadline is 4 p.m. ET on June 13, an auction will take place on June 15, and a sale hearing will take place on June 23.

New York-based Pareteum is a cloud communications platform-as-a-service company. The company filed bankruptcy on May 15 under Chapter 11 case number 22-10615.

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