(Reuters) – Payments processor Cynergy Data LLC filed for Chapter 11 bankruptcy protection on Tuesday and said it has agreed to sell all its assets to private investment firm ComVest Group through a court supervised auction.
ComVest will act as a “stalking horse” bidder for Cynergy’s assets at the auction, according to papers filed with the U.S. bankruptcy court in Delaware. A stalking horse makes the lead bid at a bankruptcy auction and creates a floor for the bidding.
Cynergy said it has retained Charles Moore as its chief restructuring officer.
In an affidavit, Moore, a senior managing director of CM&D Management Services LLC, said he was hired after Cynergy discovered accounting errors in March 2009. He said these errors misstated revenue and expenses for 2007 and 2008, leading to a substantial drop in earnings following a restatement.
Cynergy said it has about $109.5 million of assets and about $186.2 million of debt. The New York-based company was founded in 1995 and employs nearly 275 people, according to the company’s website.
The case is In re: Cynergy Data LLC, U.S. Bankruptcy Court, District of Delaware (Wilmington), No. 09-13038. (Reporting by Santosh Nadgir in Bangalore; Editing by Deepak Kannan; )