Wednesday, September 3, 2008

Bankruptcy court appoints interim management of Cyphermint

By Mass High Tech Staff

Marlborough-based mobile payments technology developer Cyphermint Inc. was in bankruptcy court this week, with executives and creditors wrangling for control of the firm’s intellectual property, according to published reports.

A bankruptcy judge today approved the installation of an interim management agreement for New York-based C.A. Acquisition Corp. to run Cyphermint until it is sold, the Worcester Business Journal reported.

C.A. Acquisition is one of Cyphermint’s creditors, though the details of the relationship were not clear. However, according to the Worcester Business Journal report, today’s proceedings also revealed that C.A. Acquisition is partially owned (12 percent) by Winchester-based Sheffield Corp., which is also a creditor of Cyphermint, a situation that reportedly made the judge uncomfortable.

Cyphermint’s funding history is vague, but Mass High Tech reported the company was close to a $5 million funding earlier this year. According to today’s hearing, St. Petersburg, Russia-based Promtex LLC and SIA AMTO, were both part of that round. Representatives for the firms at the bankruptcy hearing said investors consider the company’s intellectual property valuable and would like to see the company shut down while a sale is being made.

Also earlier this year, Cyphermint expanded an existing partnership with package delivery company DHL International Ltd. According to earlier reports, the interim management expects to uphold its obligations to DHL.

Founded in 2000, Cyphermint developed software for making mobile payments through cell phones and kiosks. The company was originally founded in Russia and relocated to the U.S. in 2000.

Anyone wishing to make an offer for Cyphermint’s assets must do so through the bankruptcy court by the end of the day Sept. 25.