Amp'd Mobile seeks court approval of agreements with two collection agencies

By Reshmi Basu

New York, Aug. 29 - Amp'd Mobile, Inc. asked for court approval of new agreements with Vengroff, Williams & Associates, Inc. (VWA) and Pinnacle Financial Group, Inc. for the continued collection of account receivables, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the motion, both agencies provide collections services for unpaid accounts at all stages of delinquency. In return, they are each paid a contingency fee for their work.

In July, Amp'd Mobile put up the account receivables business for sale as part of its plan to liquidate substantially all of its assets. However, Amp'd Mobile decided not to part with the business since it is one of the company's largest assets.

"VWA and Pinnacle have a proven track record with the debtor and their continued collection services are essential to the debtor in its efforts to not only pat the secured lender, but to also provide a recovery to other creditors," the company said in the motion.

Under the agreement subject to court approval, VWA will be paid a contingency collection fee of 22% on all accounts placed.

In addition, upon successful recovery of funds via the litigation route, a 35% referral fee and approved costs will be deducted from the proceeds and the net amount of recovery will be turned over to Amp'd Mobile.

Both VWA and Amp'D Mobile agree to indemnify each other.

Meanwhile, under the new deal with Pinnacle, the agency will receive a 25% contingency fee on all primary accounts placed on or before July 31; 21% on all payments made after July 31; and 40% on all monies collected through litigation.

A proposed hearing is scheduled for Sept. 6.

Amp'd Mobile, a Los Angeles wireless phone company, filed for bankruptcy on June 1. Its Chapter 11 case number is 07-10739.

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