Amp’d Gets Cramp’d
Wireless-Entertainment Startup May Shut Down by July 31
By Todd Spangler -- Multichannel News, 7/24/2007 1:58:00 PM
The party might be officially over next week for Amp’d Mobile: The wireless-entertainment startup, which is in the midst of bankruptcy proceedings, said in a notice on its Web site that it may shut down operations as soon as July 31.
Los Angeles-based Amp’d suspended customer service Monday, according to the notice. On June 1, Amp’d filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.
The startup -- which targeted young men with a mix of video clips, games and music content -- functioned as a mobile virtual network operator piggybacking on Verizon Wireless’ network. The startup owed Verizon Wireless around $54 million as of July 23, according to court documents, while it had just $9,000 in cash.
Attorneys for Amp’d last Friday filed an expedited motion to establish bidding procedures for the company’s assets. On Monday, Verizon Wireless filed an objection to a plan submitted by a committee of unsecured creditors. The carrier said it should not be compelled to continue providing service to Amp’d customers while the startup is liquidated. That means Amp’d could go dark if the bankruptcy court agrees with Verizon.
Amp’d, founded in December 2005, reported having 200,000 subscribers at one point. According to its bankruptcy filing, the privately held company has more than $100 million in debts. In addition to Verizon Wireless, other creditors include Motorola and Best Buy.
The company said it was seeking bankruptcy protection because its back-end infrastructure was unable to keep up with customer demand. Amp’d also said many of its customers did not pay their bills.
Investors in the mobile venture included Intel, Qualcomm, MTV Networks, Universal Music Group and several venture-capital firms.
Amp’d had garnered some buzz for producing original animated shorts, including the parody Lil’ Bush, which was picked up as a series by Comedy Central last year.
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