Brigadoon.com, which recently emerged from its own Chapter 11 bankruptcy, submitted a $275,000 purchase proposal late Friday to U.S. Bankruptcy Court in San Jose, California. Under Chapter 11, a company may continue to operate while it draws up a debt-repayment plan.
Under terms of the proposed deal, Brigadoon.com had to pay @bigger.net's bills of $35,000 to MFS WorldCom and $7,250 to Concentric Network by 5 p.m. today, a deadline that Brigadoon.com executives said they would meet. The deal must still be approved by the court, however.
"Any sales have to be confirmed by the court. We're starting that process right now," said Suzanne Decker, the Chapter 7 trustee handling the case.
Brigadoon.com chief executive John Hansen said he expects the deal to close in seven to ten days.
@bigger.net first faced financial troubles last year, and the company, which charged users $59.95 for a lifetime of Internet access, filed for Chapter 11 protection from creditors in December. Last month, the company threw in the towel, filing for liquidation. But under a special court order, @bigger.net has continued to provide service--without technical support--so the company's assets and customer base could be sold.
"We had about ten different parties interested, but this is the only one that came through with an actual written proposal," Decker said.
Founded in 1995, Brigadoon.com has about 7,000 subscribers. The company provides inexpensive Internet access to public schools, churches, and nonprofit community organizations via affiliate partnerships.
But Brigadoon.com has had its own financial difficulties. When a potential partnership soured and the company that had helped finance operations wanted its money back, Brigadoon.com was forced into bankruptcy, Hansen said.
The company's Chapter 11 reorganization plan was confirmed by creditors and the court October 19, according to U.S. Bankruptcy Court for the Western District of Washington in Seattle, where Brigadoon.com is based.
Brigadoon.com's plan calls for repaying about $400,000 in outstanding debt over the next five years, Hansen said.
"We were interested in @bigger.net for both its customers and its technology," Hansen said. "They do have some propriety software that we're interested in that would allow us to offer some new features and value-added services."
Brigadoon.com intends to continue providing service to @bigger.net customers and will add several new pricing levels when and if the purchase is completed. Brigadoon.com offers Net access, email and web hosting services from between $17.95 and $49.95 per month.
@bigger.net offered Net access and email accounts for an additional $10 annually to roughly 20,000 subscribers in the San Francisco Bay Area and Southern California. Estimates on the number of @bigger.net's subscribers varied widely, ranging from 17,000 to 45,000, and Hansen said that "we based our proposal on 20,000."