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By Daniel Gill
“But wait ... there’s more!” Or is there?
Ronco, the bankrupt gadget maker whose infomercials on products like the Veg-O-Matic featuring founder Ron Popeil and pop-culture gems like “set it and forget it” and “it slices, it dices,” is unclear about the future, its bankruptcy attorney told Bloomberg Law May 9.
As revealed by Ronco’s schedules and statements filed May 8, the company may face a unique challenge in bankruptcy. It appears to have transferred substantially all its assets prior to filing bankruptcy.
The company filed Chapter 11 April 24, claiming assets and liabilities between $1 million and $10 million. It’s the second turn through bankruptcy since Popeil sold the company for $55 million in 2005.
This time, Ronco ran out of money and ceased operation in January, Kell Mercer, the company’s attorney, said. It currently has a staff of one.
Prior to filing, Ronco commenced assignment for the benefit of creditors proceedings in New Jersey. ABCs are state procedures similar to bankruptcy and allow for sales of businesses with certain protections.
In the ABC, Ronco gave substantially all its assets to a neutral assignee in anticipation of a sale to a third party which would be approved by a judge. But the company filed bankruptcy before that sale could occur.
Mercer said that it’s unclear whether the assignee will voluntarily transfer Ronco’s assets back to the company, or whether Ronco will have to file a complaint in the bankruptcy case to recover the assets.
In the meantime, Ronco is looking for debtor-in-possession financing, to allow it to resume operations and resolve its debt.
“We are still optimistic for landing DIP financing and having a path forward in the bankruptcy,” Mercer said.
The company’s objective is to resume operating and emerge from bankruptcy as a going concern. If that’s not possible, then the company will have to sell its assets, consisting mostly of patents and trademarks. Failing that, it may convert to a Chapter 7 for liquidation, Mercer said.
“The direction of the case is unclear at this time,” he said.
The debtor is represented by Kell Mercer, Austin, Texas.
The case is In re Ronco Holdings, Inc. , Bankr. W.D. Tex., Schedules and Statement of Financial Affairs 5/8/18 .
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