White Winston Select Assets Funds filed with the U.S. Bankruptcy Court a motion to appoint a Chapter 11 trustee and motion to prohibit the use of cash collateral in the Multimedia Platforms case.
The motion explains, “The Debtors and their management are dishonest and have defrauded White Winston, have breached their fiduciary duties to the Debtors and otherwise have continued to act in ways that are destructive of the Debtors’ value and White Winston’s collateral. The Debtors, with their non-debtor affiliate Columbia Funmap (‘CFI’), knowingly and intentionally diverted cash receivables they pledged as collateral to White Winston into a bank account in the name of Debtor MPW….After White Winston discovered Debtors’ fraud and demanded that diverted cash collections be conveyed to the lockbox account, MPI’s CEO and three board members promptly resigned, leaving Bobby Blair as the sole director, Chairman, Chief Executive Officer and President.”
The motion continues, “A chapter 11 trustee should be appointed at the earliest available opportunity for all of the Debtors so that a prompt sale process of the Debtors’ business can occur to limit the erosion of value available for creditors. Finally, the Court should prohibit the Debtors from using White Winston’s cash collateral pursuant to 11 U.S.C. section 363(e)….The Debtors have provided White Winston with absolutely no information whatsoever about their business plans and intentions regarding usage of cash collateral.” The Court scheduled an October 14, 2016 hearing on the motion.
According to documents Multimedia Platforms filed with the SEC, “The voluntary [Chapter 11] petitions were filed in response to a Temporary Restraining Order entered by a state court in Massachusetts filed by the Company’s principal lender.” Multimedia Platforms entered into a master credit facility agreement for a principal amount of $1,750,000 provided by White Winston Select Asset Funds, LLC (White Winston) on July 29, 2016. On September 9, 2016, White Winston declared a default related to (a) a failure to pay interest and (b) breaches of unspecified representations and warranties. Multimedia Platforms explains, “As a result of the alleged defaults, White Winston accelerated the Note and demanded assemblage of all collateral.”
In Court-filed documents, Multimedia Platforms notes, “Essentially, White Winston has, in a period of 55 days, shutdown the Debtor’s entire business….The actions of White Winston have caused substantial harm to the Debtor….The Debtor has devoted substantial time, effort and capital towards building its brand and creating a cutting edge media platform. The actions of White Winston will not stop the Debtor’s efforts to continue providing the best in media and technology for the benefit of its shareholders, creditors and the LGBT community.”
Read more Multimedia bankruptcy news.
The post Multimedia Platforms Trustee Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.