Poynt's creditor protection move a result of disagPoynt works with Toronto-based Intertainment Media Group to provide language translation services to its local listings mobile app. But last week a disagreement between the two arose. Poynt elected to make a filing under the bankruptcy and insolvency act to arrange financing and says its operations have not been affected.
7/11/2012 3:42:00 PMBy: Brian Jackson
Calgary-based mobile app firm Poynt Corp. filed for creditor protection as a result of not being able to reach an agreement on a loan extension with its Toronto-based partner Intertainment Media Inc., ITBusiness.ca has learned.
Poynt develops a mobile app available across many platforms and trades under the PYN symbol on the TSX, filed a notice of intention under the bankruptcy and insolvency act at 12:29 AM ET on July 6. It is seeking creditor protection status so that its creditors will be stayed for a period of 30 days. The financial maneuvering came as the result of not being able to agree to terms on a $1.5 million loan with Intertainment, according to Poynt CEO Andrew Osis.
“We just needed a few more days and in exchange they wanted a lot more cash,” he says. “They were willing to, not for a pound of flesh, but for an entire body of flesh.”
At the same time Poynt filed for creditor protection, it announced that board member David Lucatch resigned from his position. Lucatch is also the CEO ofIntertainment Media, and the loan issue resulted in a conflict of interest for Lucatch, who could no longer pursue the best interests of both companies.
But Intertainment was reasonable in its loan repayment negotiations with Poynt, according to Brad Parry, the chief marketing officer at Intertainment. It was under the impression as of 1 PM Eastern Time on July 5 that an agreement to extend the loan was in place with Poynt's chairman Craig Bentham. But communication broke down and an agreement was not finalized before the original loan period expired at the end of day, according to Parry. Then Poynt announced it was filing for creditor protection.
“We were all taken aback by this,” Parry says. “Why would we want this to fail? We worked with their executive team and their board for over three weeks on this.”
Poynt announced it was filing for creditor protection at 12:30 AM ET on July 6.
Intertainment was expecting a call from Bentham to finalize a new agreement to extend the loan at 3 PM ET. According to Parry, that never happened. Parry says he tried to call Poynt's chairman and also e-mailed him. At 4 PM, Intertainment submitted the letter of extension on the loan to Poynt's legal counsel and executive team. At 4:18 PM, the legal team replied and said they'd review the letter. But no response was received, according to Parry.