Tech giants feel pinch of Standard closure
Technology giants Corio and Siebel Systems, as well as a host of real-estate companies, top the list of those holding IOUs from the parent company of The Industry Standard.
When it filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of California on Monday, Standard Media International owed $10.5 million to its top 20 unsecured creditors. Overall the company said it owed between $10 million to $50 million and had assets in the same range.
Among Standard Media's creditors was The Four Seasons Resort in Carlsbad, Calif., to whom the company owed $241,879.99 for its annual Internet Summit, Ann-Marie McGowan, the company's chief operating officer, said Tuesday. The conference, which The Industry Standard hosted at the Four Seasons last month, attracted such Net and technology luminaries as Microsoft Chief Executive Steve Ballmer, Kleiner Perkins Caufield & Byers partner John Doerr and eBay Chief Executive Meg Whitman.
Standard Media's landlords comprised nine of its top 20 unsecured creditors. The company owed about $4.3 million in leases to companies such as Pyramid Investment and CarrAmerica Realty for offices in San Francisco, New York, Boston and Chicago. Standard Media owed Pyramid Investment $1.8 million alone for one of its buildings in San Francisco.
Among Standard Media's other top creditors were:
• Application service provider Corio, to whom Standard Media owed approximately $2 million. Corio was hosting PeopleSoft's human resources software for the publication.
•Customer relationship management software provider Siebel, to whom the company owed $1.5 million.
• Yahoo, to whom Standard Media owed $543,750 for distributing stories from The Industry Standard in the Web portal's financial news section.
• Database software maker Oracle, which was owed $329,000.
• Lexis-Nexis, which was owed $160,000. Lexis-Nexis maintains a subscriber-based database of news stories and court decisions.
Standard Media ceased publishing the weekly The Industry Standard two weeks ago, blaming financial difficulties. The company expected to get a bridge loan to sell the magazine, but negotiations fell through with several parties, company executives said.
The company decided to file for bankruptcy protection within the last two weeks but delayed filing to put its paperwork together, McGowan said. It could have suspended the filing if a buyer or investor had stepped forward to help the company satisfy its creditors, she said.
"But that didn't happen, and we didn't expect it to happen," McGowan said.
As part of the decision to cease publication, The Industry Standard laid off 160 of its 180 workers. The company laid off dozens of workers in two rounds of job cuts earlier this year.
Although the company paid severance in earlier rounds, employees laid off after it ceased publishing did not receive severance checks.
McGowan said the company is in discussions with several parties interested in everything from buying the company's customer list to restarting the publication. She declined to say which companies Standard Media is talking to but said they range from "the usual suspects" to international concerns.
"It's a question of who bids the most in bankruptcy court at this point," McGowan said. "I think the interest is fairly serious."
Judge Thomas Carlson will preside over the Standard Media's bankruptcy case.