June 16, 2015
By Bob Coleman
Editor, Hot Topic Tuesday
The sale of Mark Feathers’ small business lending company SBA license has fallen through.
The approved bidder, BusinessUS was unable to close the transaction, and SBA has withdrawn their support says the receiver in a court filing last Friday.
Writes the receiver:
The Agreement called for the sale to close on or before June 10, 2015. Following entry of the Sale Order, the Receiver immediately contacted BusinessUS concerning the timing to close the sale, and the payment of the $179,000, reflecting the balance of the deposit due under the Agreement (based upon the total sales price of the Assets approved under the Sale Order.) BusinessUS informed the Receiver that it would immediately transmit the balance of the deposit and indicated that it was ready to close the Sale as soon as it resolved matters with the SBA.
In following up with the SBA, the Receiver learned that BusinessUS had materially changed its submissions to the SBA with regard to a number of matters including but not limited to its management structure and financing. The Receiver also learned that contrary to prior representations, BusinessUS did not have the financing in place to timely close the sale.
Over the next several weeks BusinessUS repeatedly assured the Receiver that it would deliver the balance of the deposit but it repeatedly failed to do so. On June 5, 2015, the Receiver was copied on a letter to BusinessUS from the SBA whereby the SBA stated that they would not approve BusinessUS as the purchaser of the Assets based upon the material deficiencies in their application.
As a result of BusinessUS’s failure to comply with the Agreement including but not limited to its failure to make a timely deposit and failure to close the sale of the Assets on or before June 10, 2015, BusinessUS has defaulted under the Agreement. It is the Receiver’s intention to retain the $300,000 deposit made by BusinessUS. The Receiver has demanded BusinessUS also pay $179,000, reflecting the balance of the deposit. Should BusinessUS fail to promptly remit these sums, the Receiver intends to file an action in this Court to collect $179,000 plus attorney’s fees and costs.
In light of BusinessUS’s breach of the Agreement, the Receiver intends to reopen its marketing efforts with regard to the Assets. In addition, the Receiver is analyzing the possibility of placing the Assets in a liquidating trust, subject to approval from this Court.
The Receiver expects to present a proposal to this Court as to how to proceed in the next 30 days.
You may contact the Receiver at http://sbcapitalreceiver.com/