From the ASA

Bankruptcy Trustee Endorses Plan To Revive VMS Firm

Ensemble Chimes Global, the large vendor management service that abruptly declared bankruptcy this month (see the Jan. 14 issue of Staffing Week), is reportedly back in operation under a special agreement between the bankruptcy trustee and a prospective buyer. The prospective buyer has been authorized to run the business while a deal is completed to buy Chimes’s assets.

In an effort to “calm events surrounding a difficult situation,” the trustee and prospective buyer issued a joint letter Jan. 17 addressed to suppliers, customers, and “other interested parties of the former ECG organization.” The letter outlined a plan to sell Chimes’s assets and establish a process for paying staffing firms that supplied services to Chimes’s clients.

The prospective buyer is Barry Olson, the original founder and president of Chimes. According to the letter, Olson has entered into an agreement with Vedior NA to buy Chimes’s assets. The transaction is expected to be completed in 10 business days.

The trustee, Howard Ehrenberg, has asked the bankruptcy court to approve a process for paying suppliers during the 10-day interim period.

In a telephone conversation with ASA last week, Ehrenberg said the purpose of the process is to ensure that suppliers and employees get paid and to facilitate the continuation of the existing Chimes arrangements with clients. He said the payment proposal would be included in a motion to sell Chimes’s assets that was filed with the bankruptcy court Friday. Ehrenberg expects the court to approve the motion, which will be heard Jan. 23.

Under the proposed process, employee time and expenses are to be entered and approved in the Chimes system. A consolidated invoice will be generated and payments made to suppliers, less the management fee, for approved hours and expenses worked and incurred after Jan. 9. Hours and expenses worked, incurred, and approved prior to Jan. 9 will be paid “as long as the hours and expenses are billed as part of the normal billing cycle after Jan. 9, 2008.” Ehrenberg explained that the latter provision is intended to include services provided before Jan. 9, even if the client has already been invoiced for those services, as long as the client hasn’t already paid the invoice. He said that amounts already paid to Chimes would have been seized by Chimes’s lender, the hedge fund Golden Tree, and therefore a staffing firm that did not receive its payment from Chimes would have to seek recovery of those amounts by filing a creditor’s claim.

Ehrenberg reiterated the statement made in the joint letter that the secured lender (Golden Tree), which holds a lien against Chimes’s assets, has assured him that it will not make any claim on future payments to suppliers except for management fees.

The letter pointedly advises clients not to enter into outside arrangements until further instructions from the bankruptcy court and states that clients should avoid paying suppliers directly. “Staying within the process spelled out in the letter provides customers with the assurance that they have honored the guidance provided by the trustee and protects them against future claims from secured creditors,” the letter concludes.

Staffing firms that are owed money under Chimes agreements should consult with their counsel regarding their rights and obligations. The joint letter is available on the ASA Web site, americanstaffing.net.

ASA will continue to monitor developments in this extraordinary process with the advice of expert bankruptcy counsel and the ASA legal committee. ASA will provide information and guidance to members as events unfold.

If you enjoyed this post, make sure you subscribe to my RSS feed!

January 21, 2008 | Filed Under Chimes Chapter 7 

Comments

One Response to “From the ASA”

  1. Careers in the culinary arts. on July 5th, 2008 10:42 am

    Culinary arts information….

    Culinary institue of america. Culinary dictionary. Culinary schools….

Leave a Reply