Broadstripe, LLC, the St. Louis-based cable, phone and internet provider, filed for bankruptcy in Delaware on January 2, 2009. Broadstripe was formerly known as Millennium Digital Media Capital, LLC and began in 1998 as a cable operator. During its first two years in business, Broadstripe acquired cable companies in Maryland, Washington, Oregon and Michigan. By the time it filed for bankruptcy, Broadstripe grew to provide media services to approximately 300,000 homes.
Why Broadstripe Filed for Bankruptcy
Since its beginnings in 1998, Broadstripe implemented an acquisition-based business model. Despite its growth, Broadstripe’s profitability was challenged by satellite television service providers, along with agressive competition from landline providers. At the same time Broadstripe was acquiring cable providers, it also faced significant cost increases due to network upgrades needed to remain competitive. (Read Broadstripe’s Affidavit in Support of its First Day Motions here).
First Steps in Bankruptcy
One of the first orders entered by the Bankruptcy Court allows Broadstripe to pay prepetition claims to certain critical vendors, as well as prepetition franchising fees to franchising authorities. Under the critical vendor order, Broadstripe has the authority to pay critical vendors up to an aggregate amount of $500,000. Like with other critical vendor motions, vendors who accept payments from Broadstripe agree to provide the debtor with customary trade terms during the course of this bankruptcy proceeding. Any creditor that accepts payment from Broadstripe pursuant to critical vendor order, yet fails to implement customary trade terms, will be deemed to have received an "unauthorized postpetition transfer" which Broadstripe may seek to recover. (Read the Broadstripe Interim Critical Vendor Order here).
The Broadstripe bankruptcy is pending before the Honorable Christopher S. Sontchi. Broadstripe retained Ashby & Geddes as bankruptcy counsel. On January 6, 2009, the Court entered an order appointing Epiq Bankruptcy Solutions as Broadstripe’s claims and balloting agent.