US based Audio Research Corporation who engaged in a messy fight for survival has found themselves the subject of new court action overnight as new creditors are revealed, in Australia their products are distributed by Melbourne based Synergy.
Recently the company’s assets were placed in a trust a form of receivership according to the “assignee” Lighthouse Management Group, who last night filed new claims in a Minnesota Court as the business fights claims from creditors including the Minnesota Bank and Trust who claim that they are owed over $2M and have security over assets and the business.
Patrick Finn from Lighthouse Management Group has now filed for an extension in an effort to protect the company from any actions by creditors until September 1, 2023.
Initially the Court only granted a stay for 30 days.
In his recent filing that came to light during the recent applications to the court Finn identified that that Audio Research has a secured loan “payable to Minnesota Bank & Trust.”
This loan is one in which the bank holds a security interest “…in substantially all assets of the company which was perfected by the filing of a financing statement on December 29, 2021, he claims.
The drama at for ARC started to unfold in late April 2023, when an Assignment for the Benefit of Creditors which is a form of receivership was filed.
This resulted in the company’s assets being placed in a trust that is set to be fully turned over for control and disposal of by LightHouse Management Group who are confident that they will find a buyer for the business.
ChannelNews understand that several staff could become the new owners if they can raise the capital needed to buy out the business.
In the Minnesota District Court filings, the assignee had identified two critical needs for immediate action including getting a “stay” blocking any actions from creditors or others against the company extended.
Finn also asked the Court to confirm his appointment and to confirm that he has the full weight of the law behind him to conduct his duties as assignee.
ChannelNews understands that apart from the $2.3M owed to the Minnesota bank an additional A$1.48M is owed to an unsecured creditor.
Finn confirms in his filings that Audio Research’s “principal assets” consist of accounts receivable, inventory, work in process, materials, intellectual property, customer lists, manufacturing and office equipment and cash on hand.” He does not reveal the value of these assets.
What’s not known is how much stock is in Audio Research Corporations channel and whether a new owner will take liability for warranties on stock already in the channel.
Finn claims that he has multiple potential buyers interested in buying Audio Research and that he is confident of a deal that will “Maximize value for all creditors.”
He claims that ‘Several parties have shown interest in acquiring the Assignment Property as a going concern and have commenced due diligence’.
Finn has told the court that he “Hopes to have letters of intent in hand very soon and to have selected a buyer by the time the hearing on this Motion is heard.” by the Court on May 17.
He claims, “The success of this case depends on having time to market and sell Audio Research’s business and assets,” the assignee notes in his filing. “A rushed process would be unfair to all creditors, including any existing or potential litigants.”
