Video software provider MobiTV has filed for voluntary Chapter 11 bankruptcy, the company announced today. MobiTV provides video solutions for numerous providers, large and small.
Under the voluntary chapter 11 bankruptcy filing, submitted to U.S. Bankruptcy Court for the District of Delaware, MobiTV will embark on a restructuring process. The company has received a $15.5 million debtor-in-possession financing facility to support operations during the restructuring.
In a letter addressed to partners of MobiTV, the company’s CEO Charles Nooney says he expects the restructuring process to be completed in the second quarter of 2021. Nooney stressed that the company is not going out of business.
“Please be assured that this action does NOT mean the Company is going out of business,” said Nooney. “We will continue to provide live and on-demand video solutions to our customers and will continue to review our services through the case proceedings.”
The sale of the company is an option in chapter 11 restructuring, as the press release notes, saying a going-concern sale under section 363 of the Bankruptcy Code is an option.
Rumors of financial troubles for MobiTV have been circulating for a few weeks. Light Reading recently highlighted these reports of financial trouble a couple of weeks back.
MobiTV’s products enable video service providers to offer a traditional pay-TV line up, as well as on-demand and app-based streaming services. The company launched a cloud-based offering a few years back that allowed a video provider to offer service without the need of a full-fledged video head end.
News of a MobiTV bankruptcy is sure to raise the anxiety level for the video distribution business among cable and broadband providers. The company’s products enable a significant percentage of the pay-TV industry here in the U.S., at least in terms of the number of video providers who use it. Numerous small video providers, as well a few large high profile accounts, including T-Mobile’s TVision service, are among MobiTV’s customer base.
The company notched a partnership agreement with the National Cable Television Cooperative in 2017 to offer its services to the hundreds of NCTC members, who are primarily small, rural cable and broadband providers. According to it’s bankruptcy filing, MobiTV has over 120 television providers using its service, serving over 300K end subscribers.
Updated on March 2, 2021: Bankruptcy disclosures are pointing to a sale of MobiTV assets as the outcome of the restructuring, with T-Mobile as a potential suitor. T-Mobile, through a subsidiary, loaned MobiTV bridge financing as the company tried to right itself.
The chapter 11 process was determined to be the best path for MobiTV to maximize the value of the assets to be sold. An open auction for the company’s assets is the likely path, but MobiTV may also pursue a “stalking horse purchaser.”