Judge accepts $8-million bid for Axium staffing subsidiary
A Florida company won the rights to Axium International Inc.’s staffing subsidiary at a federal bankruptcy auction Wednesday, two weeks after the Hollywood payroll service provider abruptly folded.
MPS Group Inc., a provider of staffing and consulting services, won the auction after its bid of $8.075 million was approved by a bankruptcy judge during a three-hour proceeding in downtown Los Angeles. The publicly traded Jacksonville, Fla.-based group will acquire the assets of Ensemble Chimes Global, or ECG, a provider of contract workers and other personnel services.
“We’re very pleased with being selected,” said Greg Holland, senior vice president of MPS. “We’re going to make it our first order of business to get out in front of the Chimes customers and their vendors to try to ensure the continuity of services.”
The assets included the company’s proprietary software program, RightsMax, related intellectual property and customer contracts and property leases. ECG provided or managed more than 2,000 employees.
Former Chimes Inc. President Barry Olson began the bidding with a $7.5-million offer. Last year, Axium paid $80 million in cash to acquire Chimes, which was combined with another Axium subsidiary to form ECG.
Olson did not make a counteroffer when MPS topped his bid.
“It went as well as could have been expected,” said Howard Ehrenberg, the court-appointed bankruptcy trustee, after the auction. “The bottom line is, what was considered valueless as a result of being shut down has brought in $8 million.”
Axium, one of three major Hollywood payroll companies, closed its offices this month in Los Angeles, Burbank, New York, London, Toronto and Vancouver, Canada, and filed for liquidation bankruptcy. An e-mail from an Axium executive in New York ordered employees to leave and not return to work.
Fallout from the company’s abrupt closing stung entertainment industry workers holding suddenly worthless paychecks, production companies with thousands of dollars frozen in payroll accounts, and about 400 Axium employees who were fired.
Axium’s largest creditor, GoldenTree Asset Management, last week sued the company’s former principal owners in Los Angeles federal court, alleging massive fraud and theft.
The New York investment firm alleged that former Axium principals John Visconti and Ron Garber treated the company “as their own personal piggy bank to finance their extravagant lifestyles.”
On Wednesday, about 75 attorneys for Axium’s various creditors and clients packed the courtroom during the auction while several others phoned in.
The sole substantive objection to the sale was made by an attorney for Maha Visconti, the estranged wife of John Visconti, who argued that the auction should be delayed to allow for more bidders.
But Judge Sheri Bluebond disagreed. “This is a sale that needs to happen quickly,” she said. Otherwise, “there won’t be anything left to buy.”
Axium’s payroll-processing assets are expected to be auctioned next week with a sale date likely to be determined today. The opening bid will probably be about $2.5 million, Ehrenberg said.
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