Law enforcement software firm Thinkstream may be headed for a quick sale
Thinkstream may be on the auction block next month.
Bankruptcy trustee David Rubin is asking a judge to allow the sale of the company’s assets that are free and clear of liens, saying he believes Thinkstream lacks sufficient cash resources to continue operating past the beginning of January. Rubin says by year’s end, he anticipates spending the balance of a $750,000 loan he secured in August to keep the company afloat. A monthly operating report for October indicates the company had $44,227 in total assets and nearly $21.7 million in debt.
Up for sale: All of Thinkstream’s patents, trademarks, contracts and equipment.
The Baton Rouge tech firm founded by Barry Bellue offers a suite of software technology that allows law enforcement agencies to instantly access information from one another’s databases—arrest warrants, criminal histories, mugshots, fingerprints, aliases and more—via laptops and mobile devices. Hundreds of law enforcement agencies in Louisiana and nationwide use the software—including the Baton Rouge Police Department, the East Baton Rouge Parish Sheriff’s Office and the Louisiana Department of Public Safety, which includes Louisiana State Police.
“Many of [Thinkstream’s] customers rely on [its] technology for mission-critical, life-saving applications,” Rubin writes in his motion filed late last week. “There is a reasonable possibility that public health and safety could be impacted if [Thinkstream] were to cease operations.”
Since September, the trustee has been working with SSG Advisors on a nationwide hunt for possible buyers. Some 36 potential new owners—including those who had previously expressed an interest in acquiring the company, as well as its competitors—were contacted or initiated contact. Although four of those entities went on to conduct more due diligence into Thinkstream, none made offers or expressed further interest, Rubin says.
The trustee has since drafted a deal with First National Bank of Commerce of New Orleans—one of Thinkstream’s two major creditors—to buy the software firm for just under $5.1 million. That price includes the more than $4.1 million Thinkstream owes FNBC, plus bankruptcy exit costs of $944,750. Rubin proposes an auction next month to see whether any other potential buyer makes a better offer.
Late Monday, TSB Ventures Inc. of Folsom—a Thinkstream creditor owed $10 million—filed a motion asking a judge to first determine the validity and priority of liens on Thinkstream’s assets and marshall those assets to ensure equitable distribution. As Rubin has noted on multiple occasions, FNBC and TSB Ventures share claims on the same collateral.
In its motion, TSB also alleges that Bellue violated several federal and state securities laws, and seeks equitable subordination against any claim he may have on collateral for one of the loans at issue.
A hearing on the proposed sale is scheduled for Dec. 3 in Baton Rouge federal bankruptcy court.