HOUSTON -- Tidel Technologies, Inc. (Nasdaq:ATMS) says it has been pursuing its claim of approximately $27 million as a principal secured creditor in the Chapter 11 bankruptcy proceedings for Credit Card Center over the past two months.
In a news release, Tidel says it is being represented by three different legal teams in New York, Pennsylvania and Texas, as well as a New York-based financial consulting firm. In the most recent hearing on the matter on July 27 in Philadelphia, the bankruptcy court allowed the continued use of cash collateral to fund CCC's operations and set the next hearing for Aug. 15, at which time CCC expects to submit proposals for the sale of the company to prospective buyers. Action on all other material motions pending before the court has been deferred until that date.
Also, CCC has filed its formal financial schedules with the bankruptcy court indicating total assets of $57 million and total liabilities of $78 million. Preliminary data previously furnished by CCC had indicated assets of $34 million and liabilities of $87 million.
Tidel is currently reviewing the filings to estimate amounts to be realized from the liquidation of assets securing its claim. Based on these findings, the company will establish a reserve for any amounts deemed to be unrecoverable.
According to the release, another matter of importance is the status of Tidel's $18 million 6 percent subordinated convertible debentures. As previously reported, Tidel has been working with the holders of the subordinated debt, Montrose Investments Ltd. with respect to $15 million and Liberty Acorn Trust with respect to $3 million, to effect a restructuring. The holders had previously deferred taking any action with respect to the "put right" feature of the indebtedness, but both holders have now exercised their "put rights."
Currently, Tidel is obligated to prepay the entire principal amount of $18 million, together with any accrued but unpaid interest, on or before Aug. 27. Tidel says it is continuing discussions with the debt holders as to restructuring the debt. Also, Tidel has engaged Banc of America Securities LLC to review financing alternatives and assist in the discussions with the debt holders.
As it has indicated in past releases, Tidel says it does not presently have the funds to cover the prepayment, and there can be no assurance that the funds necessary to prepay the obligation will become available.
Tidel also announced that full financial results for its third quarter ended June 30 will be reported on or about August 14.
