Embattled crime news Web site APBnews.com, valued at more than $100 million (US$) six months ago, was purchased in a bankruptcy sale Thursday by SafetyTips.com for $575,000 cash.
SafetyTip’s bid was significantly lower than the $950,000 deal the parties originally struck in mid-August. The site, which specializes in safety consulting and training, reportedly withdrew its offer to buy the company days later when “expansive due diligence” revealed that APBnews may have been overvalued.
The New York-based APB, which bills itself as “the only media company exclusively covering crime, justice and safety,” has operated under Chapter 11 bankruptcy protection since July 5th. After the first deal with SafetyTips collapsed, APB put its assets on the auction block for sale on September 1st in the U.S. Bankruptcy Court for the Southern District of New York.
Mysterious Offshore Bidder
The minimum bid was set at $950,000, and bidders were to pre-qualify by either posting a $25,000 bond, presenting a bank letter certifying availability of cash or credit, or by allowing a review of financial statements to certify ability to perform. Bankruptcy Court Judge Stuart M. Bernstein delayed the auction by a week when no prospective bidder was willing to offer the minimum bid.
“I thought, with the number of people who showed up, there would be more bidding,” Judge Bernstein said. “But there is no more bidding.”
APBnews.com bankruptcy attorney Herbert P. Minkel told the court that “after a last-ditch effort to sell the company to an offshore media firm failed early [Thursday], the crime and justice news service was left with no other bidders.”
Hours after the mysterious offshore bidder withdrew its reportedly high offer, SafetyTips agreed to purchased APBnews and all of its assets for $575,000, including the assumption of many debts.
Transition Team Formed
Under the terms of the deal, APB agreed to sell its assets, including its programming archive, to SafetyTips, which plans to continue the news service with many of the same reporters and editors.
According to APBnews.com, SafetyTips spokesperson Nancy Daniels said that “a transition team would be formed to determine the immediate future of New APB News, Inc., which the company will be called once the formal bill of sale is signed.”
The transition team, which will include members of APB, will oversee the transfer of assets and ensure the site’s content will live on through the transition.
Quick Rise, Hard Fall
APB was financed and launched in 1998. Financing that began in March 2000 failed when “a major strategic investor withdrew its commitment when it replaced its CEO and changed its strategy, and then the market crashed,” the company said.
Since June, APB has fired and rehired several employees as a result of its tumultuous financial state.
APBnews.com generates revenue from program sponsors and e-commerce partners, and from syndication and licensing of its branded content to major Web sites, television, radio, newspapers, magazines, book publishers and wireless devices.