Monday, June 11, 2001
Wilkinson firm files for bankruptcy
The Associated Press
LEXINGTON The online bookseller that former Gov. Wallace Wilkinson started has joined him in bankruptcy court.
The company, ecampus.com Inc., asked Friday for bankruptcy protection, listing $33.2 million in assets and $9.5 million in debts as of Jan. 31.
A statement from the company, which has never turned a profit, said that continued operating losses made it necessary to seek protection from creditors.
The venture was started by Mr. Wilkinson to sell college textbooks and merchandise over the Internet.
The Internet firm has spent all of the $90 million in venture capital it raised after incorporating on April 16, 1999, said Taft A. McKinstry of Fowler, Measle & Bell LLP in Lexington, the company's attorney.
It flat ran out of cash in March, Mr. McKinstry said.
The company did not submit a detailed list of assets Friday. It had only $4 million in inventory in late January, Mr. McKinstry said.
Since March, ecampus has been operating on a $1.2 million loan from Franklin Enterprises Inc., a Deerfield, Ill., company owned by George Valassis. Franklin Enterprises has agreed to lend ecampus an additional $925,000, which should sustain the company for 45 days, Mr. McKinstry said.
Mr. McKinstry also said that ecampus has arranged to sell its assets to a company called Book Acquisitions LLC, which intends to continue ecampus' operations. Mr. McKinstry did not disclose who owns Book Acquisitions, but did say it is a newly formed, out-of-state company.
Filing under Chapter 11 of the bankruptcy code means ecampus wants to reorganize, not liquidate.
Matt Montgomery, president of ecampus, said in a news release: ecampus.com is expecting to emerge as a healthy, vibrant and profitable business, predicting profits by 2002.
The company will ask U.S. Bankruptcy Judge Joseph M. Scott Jr. to approve the sale agreement and to set an auction date at a hearing scheduled Thursday. Book Acquisitions would purchase ecampus only if it remains the high bidder in the auction.
The bankruptcy filing is the latest involving Mr. Wilkinson, 59, who went into business selling paperback books nearly 40 years ago. He eventually built a sizable empire in college textbooks, banks, real estate, coal and other businesses, and served as governor from 1987 to 1991.
Wallace's Bookstores Inc. the college-bookstore chain and Mr. Wilkinson himself declared bankruptcy in February. Mr. Wilkinson listed his debts at more than $400 million.
Since January, ecampus has laid off most of its staff, moved its headquarters to its Palumbo Drive warehouse and is being required to pay cash for textbook purchases.
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