More than 2,000 creditors of the bankrupt user group Interex got a US Bankruptcy Court notice that the Interex customer list may be auctioned off on Oct. 27. HP 3000 and HP 9000 hardware supplier Genisys has asked to buy the list of names with an offer of $15,000, and the estate's trustee Carol Wu replied by saying her law firm intends to auction this asset — but the creditors still have time to object to an exclusive-use sale of the list.
It's unclear if more recent privacy laws will apply to customers on the list. Such customer lists are usually rented, rather than sold outright.
The rest of Interex's "personal property" assets — computer equipment, office furnishings — have only drawn a $3,000 offer in the trustee's first attempt at a sale. The user group's estate would lose money on that price, according to a court document filed by attorney Joanne LaFreniere. The estate's trustee hired appraiser R.J. Papale "to attempt to market the personal property and to inventory and inspect the records and property. Mr. Papale met with several prospective purchasers, and received only two offers: $3,000, and $2,500. However, even the high offer of $3,000 is still too low to economically sell the personal property."
Of course, the cost of attorney's fees for preparing documents related to the sale were among the reasons listed that "the estate would have lost money on such a deal."
One of the objections first raised to abandoning the Interex property — which takes these goods out of the court's hands — came in a letter from Genisys founder Dan Richardson, who believed the property contained the Interex customer list. Once informed by lawyers that the list was not part of the property, Richardson filed a declaration in support of the abandonment, then made his company's offer to purchase the list.
The court's report indicates that Interex's life insurance company was worried about personal information in the records. Papale has been instructed to shred all the personnel files.
Stan Sieler of Allegro Consultants and Gary Border, a former Interex board member, both want access to the property for historical purposes. The trustee's lawyer gave both men the contact name of the landlord's agent "to request access to view the property."
Any creditor who wants to bid on the Interex customer lists — which don't have a very strong record of performance for marketing, according to several 3000 community sources who rented the names at 50 cents per use — must post a $1,500 good-faith cashier's check with the court. Bids will be taken in $500 increments on Oct 27 starting at $16,500.
Some say that selling the list one time only would generate less money to pay off Interex creditors than selling it several times, for non-exclusive use. An auction of a customer-list of a 31-year old computer user group is a novel thing, however — an event without much history to guide customers on the list, creditors who can bid or object, or attorneys brokering the deal. The attorneys will bill fees at every step of the way, too. Any objections will need to be filed by lawyers, as well:
An objecting party must file with the Bankruptcy Court and serve counsel for the Trustee with a written objection, and/or a request for hearing
Objections have to be filed by Oct. 25; those good faith cashier's checks have to be at the court by Oct. 26 at 5 PM.