Belated Terry Drayton update
Here is a Jan. 28 release from Terry Drayton of Count Me In Corp., which came up about $5 million short in paying back youth sports organizations and others that used its services to collect league fees and such. Drayton continues to assert that everything would have been just fine and dandy had leagues not been so gosh-darn impatient. (Like any reader impatient it took me a few days to get around to this.)
Count Me In Corporation (CMIC) today announced it was unable to prevent an involuntary Chapter 7 bankruptcy petition and expects the court to appoint a trustee to take over the online registration and league management software company and handle liquidation of its assets.
On January 8, three Alaska-based sports club clients asked the Federal Bankruptcy Court to take over CMIC’s operations on January 28 unless the eight-year old organization could show it was paying its obligations as they became due. Those clubs are among 220 clubs and organizations across the country that CMIC owes about $5 million in outstanding online registration fees.
“We’ve been working for months in this incredibly difficult economy to find a buyer for CMIC that would allow us to repay our clients,” said Terry Drayton, CMIC CEO. “We got very close in November and were very close again this week to securing a deal but the immovable deadline of the involuntary bankruptcy petition put us in an impossible position.
“We asked the three clubs to withdraw their petition, as we didn’t think it was in the best interests of all clients, but they refused,” he added.
According to Drayton, CMIC was working with one well-qualified buyer, but the company withdrew their bid on Monday, concluding it could not complete the transaction by the January 28 deadline.
As part of Chapter 7 bankruptcy, the court appointed trustee will now take charge of liquidating CMIC’s assets and distributing the proceeds among the company’s debtors.
Drayton also announced that CMIC’s parent company Arena Group, Inc., which is not part of the bankruptcy filing, will keep all client Web sites up and running and continue to provide technical support, allowing the clubs and teams to continue to function normally while the trustee works to find a buyer.
“At least we can keep supporting the clubs for the time being and minimize their pain, including helping clients process credit card charge-backs,” Drayton added.
“This is an incredibly sad day for our Count Me In Corporation clients,” continued Drayton. “It was my intention to repay every penny we owed to our clients. Unfortunately this involuntary bankruptcy won’t help achieve that, but now it is out of my hands.”
In the company’s eight years of operation, CMIC collected about $175 million for its clients and remitted $170 million, or more than 97 percent.
According to Drayton, the company can account for every penny of the $5 million shortfall, noting the funds went to normal operating costs in incremental amounts such as improving technology and paying staff salaries over the past eight years.
Geez, it gave back 97 percent of the money it was sworn to reimburse. Is that not enough for you jackals?
The Nordic Skiing Association of Anchorage was one of the three organizations that forced Count Me In into bankruptcy. It’s owed $150,000. From the Anchorage Daily News:
“I don’t see this as a victory until everyone gets their money back,” skiing association executive director Dianne Moxness said.
Moxness said the association has not talked to Count Me In, although there have been written communications.
“They sent us an e-mail, later a letter, asking us to withdraw our petition” to force Chapter 7 bankruptcy, Moxness said. The association e-mailed back that Count Me in should “speak to our attorney,” she added.
“And they never contacted him.”
An 8-year-old company, CMI was set up to handle registrations and online credit card payments for sports and youth programs. The company took a percentage of the payments for handling the online bookkeeping and passed the bulk of the money along to the organizations, many of which are — like the ski club — nonprofits.
Up until this year, the system worked fine, said Moxness. But then Count Me In stopped sending checks even as it continued to collect payments.
It has been reported the company was diverting funds that should have gone back to its clients in order to help pay for a pricey new computer system, although it remains for an independent, court-appointed trustee to determine exactly where the money went.