Espre files for Chapter 11 after lawsuits

By Devika Patel

Knoxville, Tenn., Feb. 2 - Espre Solutions, Inc. said it has filed for Chapter 11 bankruptcy protection on Jan. 30.

As previously reported, the company received a default notice on Jan. 16 from Dalcor, Inc. in regard to a $5 million 6% convertible secured promissory note, which was sold in an August private placement.

Additional defaults now exist under the note, including lawsuits from CFM Capital Ltd. and Media Distribution Solutions, LLC. The CFM lawsuit is for unpaid compensation and the Media Distribution case alleges breach of contract. These lawsuits were the driving force behind the company's decision to file for Chapter 11.

The company seeks to reorganize itself and believes it has enough cash on hand to continue operations until such time a plan can be approved.

If Dalcor chooses to accelerate the amount due under the note, the company has said it will be unable to pay that amount. It also said that Dalcor has a first security interest in substantially all of the company's assets.

Accordingly, if Dalcor forecloses on its security interest, the company will probably be unable to continue its operations.

Espre is a Dallas-based video media solutions and technology company.

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