This story has been updated since its original publication to clarify that Thinkstream Acquisition purchased Thinkstream’s assets.
The owner of a Baton Rouge IT firm has struck a deal to purchase the assets of Thinkstream—a law enforcement software firm headed for the auction block in federal bankruptcy court—provided it is the highest bidder.
A motion filed this afternoon lays out the arrangement, in which a limited liability company formed today called Thinkstream Acquisition will take on $11.2 million in claims against Thinkstream, a Baton Rouge tech firm that provides software to hundreds of local, state and federal law enforcement agencies in Louisiana and other states. Thinkstream’s two major creditors are First NBC Bank in New Orleans, which is owed $4.9 million, and TSB Ventures of Folsom, which is owed $9.1 million.
Thinkstream Acquisition is owned by J. Smith Thomas, owner/operator of BIG Networks, a Baton Rouge tech firm that provides IT services to accounting, architecture, broadcasting and engineering firms, as well as other businesses. If Thinkstream Acquisitions is successful, the firm will remain a separate entity, but it will operate from Thomas’ existing headquarters on South Sherwood Forest Boulevard.
“We’ve assembled an experienced management team with considerable expertise in this business space,” Thomas tells Daily Report. “We are hopeful that we will be the successful bidder and are excited about the opportunity to keep Thinkstream in Louisiana and to chart a new course for the employees and customers. Our No. 1 objective is to return stability to the Thinkstream customer base.”
In the motion, federal bankruptcy trustee David Rubin notes that the compromise deal was necessary, given TSB Ventures’ opposition to his initial strategy for selling Thinkstream to FNBC in the absence of a better offer. TSB alleges that FNBC neglected to file the necessary paperwork to establish that it even has a legitimate claim in the bankruptcy case.
Under the terms of the new deal with Thomas’ firm, Thinkstream Acquisition will purchase all FNBC claims, and TSB Ventures will assign its judgment to the new company in return for a minority equity interest. Thinkstream Acquisition will make an initial bid for the firm’s assets at the auction of $1.405 million and will pay $625,000 of the initial bid in cash to cover payment of the estate’s administrative expenses. Should another entity make a winning bid, Thinkstream Acquisition will take the first $1.375 million in proceeds. Assets excluded from the sale will be distributed to unsecured creditors.
“A variety of thorny issues plague the proposed sale of assets,” Rubin writes. “The trustee and [Thinkstream Acquisitions] believe that the proposed settlement and compromise is a fair and just outcome for the sale process.”
Thinkstream was forced into bankruptcy in May, with an estimated $21 million in debt. Read the complete terms of the deal. Read more about Thomas in a recent Executive Spotlight in Business Report.
—Penny Font
