With Interep essentially shut down, bankruptcy trustee Kenneth Silverman is tying up loose ends. He’s filed with the court to reject a long list of Interep’s outstanding contracts, including employment and severance contracts. And, of course, there’s no longer any need to have Arbitron or Nielsen ratings data. A hearing is set for December 9th, but there’s little likelihood that US Bankruptcy Judge Robert Drain would find any reason to continue contracts for a company that is being liquidated.
Under Chapter 7 of the Bankruptcy Code, the court can “reject” outstanding contracts of the debtor company, essentially voiding them. Silverman has filed three motions to have the court reject Interep contracts.
The motion to reject employment and severance contracts includes a list of 25 current employment contracts to be voided. The move would terminate any obligations to Interep’s top executives, including CEO David Kennedy, CFO Bill McEntee, McGavren Guild President Lisa Sirotka-Sonnenklar and Interep Interactive CEO Adam Guild.
11 deferred compensation/retirement contracts are on the list for cancellation, along with 13 severance contracts. Included in the latter are the remaining severance payouts for former CEO Ralph Guild and former President George Pine.
Another motion to reject is accompanied by a long list of contracts for office equipment, telecommunications services, computers, software and various services. Included are the contracts for Interep to obtain ratings data from Arbitron and Nielsen.
The third motion filed by the trustee seeks to reject real estate leases in Atlanta, Boston, Chicago, Dallas, Detroit, Miami, Minneapolis, New York, Philadelphia, Seattle, St. Louis, Landover, MD and Randolph, NH. That is a bit of a surprise, since Interep’s original motion to convert its Chapter 11 bankruptcy proceeding to Chapter 7 had indicated that there might be some subleasing value in its office leases.