04-15-2005, 04:51 AM
From The Pulse...
CrossGen Sets Reorganization Plan
Nearly $10 Million Under Water
April 12, 2005
CrossGen Entertainment's "plan of reorganization" (which despite its name is a plan for the liquidation of the company) is being put to a vote of its creditors. The plan lists assets of $972,233 (the proceeds of the sale of the company's assets to Disney Publishing, see "Disney Publishing Acquires CrossGen Assets"), and liabilities of $10,798,888, a difference of $9,826,655. But that's not the full measure of CrossGen's losses. Founder Mark Alessi invested and loaned the company a total of $11,000,000, all of which is unpaid. It appears that at least $8.5 million of that was in the form of equity; the remainder was in the form of loans. Combining the equity Alessi lost with the negative net worth on the books now, the company lost somewhere north of $15 million since May of 1999.Â
Other secured creditors include Blue Ridge Investors II, LP, which lent CrossGen $1,025,000 in January of 2003; and Dee Gee Entertainment, which lent the company $300,000 in January of 2004. Tom Alessi (presumably a relative) is also listed as a secured creditor for $1,172,000, but the trustee is objecting to the secured status of the debt. The trustee is also objecting to Blue Ridge's secured status. A settlement with Dee Gee provides that half of that debt will be treated as unsecured.Â
The narrative described the events leading up to CrossGen's bankruptcy filing. According to the recounting, CrossGen had been insolvent (unable to pay its trade creditors when due) since the second quarter of 2003. And Blue Ridge swept CrossGen's bank accounts, leading to returned checks and related problems. The company's financial difficulties, in turn, made it difficult to obtain trade credit and to market the company's properties for other uses. Efforts to obtain additional investors were unsuccessful.Â
A confirmation hearing on the plan will be held on May 16th. Â
CrossGen Sets Reorganization Plan
Nearly $10 Million Under Water
April 12, 2005
CrossGen Entertainment's "plan of reorganization" (which despite its name is a plan for the liquidation of the company) is being put to a vote of its creditors. The plan lists assets of $972,233 (the proceeds of the sale of the company's assets to Disney Publishing, see "Disney Publishing Acquires CrossGen Assets"), and liabilities of $10,798,888, a difference of $9,826,655. But that's not the full measure of CrossGen's losses. Founder Mark Alessi invested and loaned the company a total of $11,000,000, all of which is unpaid. It appears that at least $8.5 million of that was in the form of equity; the remainder was in the form of loans. Combining the equity Alessi lost with the negative net worth on the books now, the company lost somewhere north of $15 million since May of 1999.Â
Other secured creditors include Blue Ridge Investors II, LP, which lent CrossGen $1,025,000 in January of 2003; and Dee Gee Entertainment, which lent the company $300,000 in January of 2004. Tom Alessi (presumably a relative) is also listed as a secured creditor for $1,172,000, but the trustee is objecting to the secured status of the debt. The trustee is also objecting to Blue Ridge's secured status. A settlement with Dee Gee provides that half of that debt will be treated as unsecured.Â
The narrative described the events leading up to CrossGen's bankruptcy filing. According to the recounting, CrossGen had been insolvent (unable to pay its trade creditors when due) since the second quarter of 2003. And Blue Ridge swept CrossGen's bank accounts, leading to returned checks and related problems. The company's financial difficulties, in turn, made it difficult to obtain trade credit and to market the company's properties for other uses. Efforts to obtain additional investors were unsuccessful.Â
A confirmation hearing on the plan will be held on May 16th. Â