SAN FRANCISCO (08/25/2000) - APBnews.com Inc. just can't catch a break. The buyer that stepped forward on Monday to purchase the bankrupt site rescinded its offer Thursday.
SafetyTip.com, which provides safety consulting and training, had offered $950,000 for the beleaguered site, which was valued at $104 million only five months ago. Now the rescuing company has apparently decided that even $950,000 is too much to pay.
"After more extensive due diligence, the [SafetyTip] board decided to withdraw its bid and let the court auction determine the value of the assets," says Theresa Vivona, a spokeswoman for SafetyTip.
APBnews maintains that it's too late for SafetyTip to back out. "We believe that they have broken a valid, legal contract," says Joe Krakoviak, APBnews' spokesman. SafetyTip says that it still plans to bid on APBnews' assets when they come up for sale at an auction in bankruptcy court on Sept. 1, and that it would keep the site running if it purchases the assets.
APBnews, which covers crime and safety issues, filed for Chapter 11 bankruptcy protection in July and has been operating with a staff of less than 20 since.
The site, which had raised more than $27 million since it was founded in 1998, fired its 140 employees in June after it ran out of money and was unable to find additional financing.
Meanwhile, APBnews' creditors are also unhappy. They groused this week that they wanted the sale date moved from Sept. 1 to Sept. 6 to allow more time for other bidders to surface. APBnews balked at the change, telling the judge "that we were going to have a great deal of difficulty getting to Sept. 6 financially," Krakoviak said. The judge, he says, agreed with that assessment.