The U.S. Bankruptcy Court approved RCS Capital’s affiliated Debtor Cetera Financial Holdings’ motion to approve a compromise and the sale of interests in Docupace Technologies and approve the assumption and assignment of related executory contract.
As previously reported, “The Purchaser will pay $9 million in cash in exchange for the Interests; the Purchaser will cause Docupace to enter into a five and a half year extension to the Cetera Contract (effective as of the closing date). During the new term of the Cetera Contract, Docupace will provide (x) Cetera ‘most-favored customer’ pricing and (y) a dedicated project manager and business analyst at the current contractual rate for such services….Since Docupace is a critical vendor to Cetera, it is imperative that Docupace continue to operate as a financially viable and stable company. If Docupace’s customers perceive that Docupace will not withstand RCS’ financial difficulties, there is significant risk that they will look to transfer business to another provider so as not to take any risk that Docupace will be unable to provide its current services or safeguard sensitive data. Simply put, like other financial services firms, Docupace is subject to a ‘run on the bank.’ If there was a ‘run’ on Docupace, it would not only harm the value of Docupace, but Cetera would be at risk of losing a vendor critical to its business operations.”
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