)
Former Australian tech darling GetSwift’s Canadian parent has entered Chapter 11 bankruptcy protection just days after the appointment of liquidators to the shell of its former ASX-listed subsidiary.
GetSwift Technology, which is listed on Canada’s NEO Exchange but is headquartered in New York, has entered a ‘stalking horse’ bid to sell its logistics software-as-a-service (SaaS) business to US property fund Stage Equity Partners in the wake of the bankruptcy filing.
The business is the primary asset owned by GetSwift which the company had already planned to sell to Stage Equity for US$10 million ($14.2 million) prior to the Chapter 11 move.
The collapse of GetSwift Technology comes on the heels of liquidators Kate Conneely and Rahul Goyal, of KordaMentha, being appointed to GetSwift Ltd, the Australian shell of the embattled company once hailed as one of the biggest tech IPOs on the ASX in 2017.
The company raised $75 million from its 2017 IPO and saw its shares surge 800 per cent on news that it had secured contracts with Amazon, the Commonwealth Bank of Australia and Yum Brands.
However, the shares subsequently collapsed after it was revealed these customers were simply trialling the GetSwift software led to a successful class action by investors. It also led to a successful civil case of misleading and deceptive behaviour brought the Australian Securities and Investments Commission against the company and its founding directors Bane Hunter and former AFL player Joel Macdonald.
In the latest sequel to the company’s downfall, GetSwift Technology and its operating subsidiary GetSwift, Inc. filed voluntary petitions for reorganisation in the United States Bankruptcy Court overnight on Monday, with plans to seek recognition of the Chapter 11 cases in the Ontario Superior Court of Justice.
"This reorganisation is the best way to ensure business continuity for our customers,” says Macdonald, the acting CEO of GetSwift in a statement to the NEO Exchange. “The Subchapter V process provides an efficient and equitable mechanism to maximise value for all stakeholders."
The company says it plans to file the customary ‘first day’ motions to allow it to maintain operations and that it intends to pay its employees as usual.
The sale of the company’s business is being undertaken under the ‘stalking horse’ provisions of the US Bankruptcy Code, with the existing offer by Stage Equity Partners ‘establishing a minimum value for substantially all of the company’s SaaS assets’.
“In order to maximise the purchase price, the proposed bidding procedures would allow for additional qualified prospective bidders to participate in an auction process,” says the company.
GetSwift has faced a whirlwind of damaging claims since its 2017 ASX listing, culminating in the Federal Court ruling last November that Hunter and Macdonald had made misleading statements and that they breached the company’s continuous disclosure obligations in statements made to the ASX between February and December 2017.
Over the period of the announcements, when GetSwift’s share price rose almost 800 per cent, the company also raised $100 million in capital from institutional investors.
ASIC sought orders to ban Hunter and Macdonald from managing corporations following last year’s Federal Court ruling.
Adding pressure on the company, the class action by investors was settled last year for $1.5 million plus contributions from any future capital raisings. GetSwift has already placed $1 million in escrow for the payment, although the remaining $500,000 remains outstanding.
Enjoyed this article?
Don't miss out on the knowledge and insights to be gained from our daily news and features.
Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.
Support independent journalism and stay informed with stories that matter to you.
)
)
)
)
)
