In a nine page legal filing dated June 1, Amp’d Mobile detailed the
circumstances that led to its filing of Chapter 11 bankruptcy
protection.
The first shock comes on the second page when the number of subscribers
is given at 100,000 on 18-month contracts, much lower than anticipated
as per their prior projections, but the biggest shock comes when the
company found out in May that the number of non-paying customers was
larger than previously thought, nearly approaching 80,000 customers or close to
80% of their total post paid customer base.
The company successfully raised additional funding from investors to
cover operations, but ran into trouble when MTV, Universal, and
private equity investors refused to provide additional funding beyond
the emergency funds.
To add injury to insult Verizon had declared a default on their
Wholesale Agreement and demanded a $4.9 million dollar payment to
continue services under the agreement, which leads to speculation that
Amp’d may be forced to discontinue services since they were not able to
pay Verizon within the ten day period given to them in a letter dated
June 1st, which led to the emergency bankruptcy filing. Ultimately it
will be left up to the judge presiding over the case what will happen
to the company.
