Judge Approves Interim Management Agreement For Cyphermint
Cyphermint Inc., a Marlborough-based mobile payment software maker, was back in U.S. Bankruptcy Court Wednesday, as a storm over who will control the company's potentially lucrative technology brewed.
U.S. Bankruptcy Judge Joel B. Rosenthal approved the following:
• An interim management agreement for C.A. Acquisition Corp. to run the company until it is sold.
• A motion giving U.S. Bankruptcy Trustee Joseph H. Baldiga authority to maintain Cypermint's existing bank accounts and to compel individuals with Cyphermint financial knowledge by subpoena if necessary.
• Procedures for the eventual sale of Cypermint's assets.
Judge Rosenthal expressed his "discomfort" with the relationship between Sheffield Corp., one of Cyphermint's creditors, and C.A. Acquisition Corp., the company that will run it temporarily until a sale occurs and at least one of the parties interested in buying the company outright.
Sheffield Corp., based in Winchester, claims it is owed nearly $100,000 by Cyphermint and was one of three firms to file for Cyphermint's Chapter 7 bankruptcy. But it also came out in court today that Sheffield, through its shareholders, owns a 12 percent stake in C.A. Acquisition Corp.
C.A. Acquisition Corp. is based in New York, according to documents filed with the Massachusetts Secretary of the State. Richard Lane of Subury is listed at C.A.'s president and was present in court today.
Attorney James P. Ehrhard, of Ehrhard & Associates of Worcester, objected to the proposed sale, calling C.A. Acquisition's proposed sale agreement for a minimum of $250,000, a "bait and switch offer."
Ehrhard said C.A. Acquisition had offered Cyphermint $3.3 million for its assets in the spring, but after running the company for awhile, lowered its offer.
Ehrhard represents two Russian investors: Promtex LLC and SIA AMTO, both of which put several million dollars into Cyphermint earlier this year, he said. The investors, who are located in St. Petersburg, Russia, believe the source code for Cyphermint's software is very valuable and would prefer to see the company shut down until its assets are sold, he said.
Attorney Philip F. Coppinger, with Seder & Chandler of Worcester, representing former Cyphermint executives Joseph Barboza and Robert Bowdring, objected to the speed with which the assets sale is proceeding.
Also present in court today were representatives from a Ghana-based company called Afric Xpress Services Inc. The African firm is one of two remaining Cyphermint customers. The other remaining customer is shipping provider DHL.
Anyone wishing to make an offer for Cyphermint's assets must do so through the bankruptcy court by the end of the day Sept. 25.
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