MobiTV has refuted an earlier report that suggested the company was poised to cease operations on May 2 and terminate its 86 employees, saying company-issued warnings to that effect were merely requirements of its ongoing bankruptcy process.
“In early March, MobiTV was required through the Worker Adjustment and Retraining Notification (WARN) Act to provide all employees with conditional notice of the possibility for employee termination if the Company’s restructuring efforts are unsuccessful," said MobiTV through a statement issued by FTI Consulting, the firm representing it through the restructuring effort. "At this time, MobiTV is not planning to cease operations, and we are continuing to operate uninterrupted throughout the Chapter 11 process, with the focus of securing new ownership or investment to emerge as a stronger company positioned for long-term service and sustainable growth for years to come.”
Following the Emeryville, Calif. firm’s announcement on March 1 that it filed bankruptcy in Delaware, and that it’s biggest customer, T-Mobile, was bailing it out with a $15.5 million loan, a company executive notified the California Employment Development Department that it might soon cease operations and lay off all 86 of its workers.
“The company may permanently terminate all employees at its facility in Emeryville,” Andrea Vinson, who holds the title of “VP of people” MobiTV, wrote in a March 2 letter to EDD. The agency posted the information on its website on March 12, the San Jose Mercury News reported.
While MobiTV’s bankruptcy filing seems to indicate a hopeful plan of engineering a company sale and soldiering, subsequent events portend a not-so-bright outlook for the video tech company, whose technology has underpinned not only T-Mobile’s soon-to-shutter TVision, but also Cable One’s Sparklight TV, as well as the app-based platforms of dozens of small cable operators.
In announcing the imminent shutdown on TVision last week, T-Mobile specifically cited the struggles of its key technology vendor, MobiTV, as a reason.
In MobiTV’s filing, the company outlined a vision in which the $15.5 million T-Mobile bridge would allow it to pay its employees and keep the lights on during its restructuring. But a comment from MobiTV CFO Terri Stevens, included in that bankruptcy filing, elegantly showcased the financial challenge the company is facing.
“The company had total assets of approximately $19 million and total liabilities of $75 million” at the time of the bankruptcy filing,” Stevens said in court records. “In the calendar year 2020, the company generated approximately $13.5 million in revenue, resulting in an operating loss of approximately $34 million.”
NEXT TV NEWSLETTER
The smarter way to stay on top of the streaming and OTT industry. Sign up below.
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!