Open Range Communications trustee sues buyer for breach of sale deal

By Caroline Salls

Pittsburgh, May 14 - Open Range Communications, Inc.'s Chapter 7 trustee filed a complaint Tuesday in the U.S. Bankruptcy Court for the District of Delaware that alleges breach of contract in connection with defendant tothehome.com LLC's contract to purchase substantially all of Open Range's assets.

Chapter 7 trustee Charles M. Forman said Open Range "lost a lucrative opportunity to sell its assets through a structured sales process" as a result of tothehome.com's alleged breach.

According to the complaint, the defendant agreed to pay $2 million for substantially all of Open Range's assets on Nov. 2, 2011 and said it had enough cash on hand to pay the purchase price and other sale-related fees and expenses.

However, tothehome.com told Open Range on Nov. 14, 2011 that it was not willing to proceed with the purchase and refused to close, the trustee said.

Forman said Open Range satisfied all of the conditions to closing "and was ready, willing and able to close on the sale" under the terms of the asset purchase agreement.

As a direct result of the defendant's failure to close, the trustee said Open Range and its professionals, as well as official committee of unsecured creditors and its professionals, "spent a considerable amount of time and legal fees turning their attention to a fire-sale liquidation of substantially all of the debtor's assets."

"The defendant's failure to close the transaction was a significant cause of the debtor's Chapter 11 case being converted to a case under Chapter 7 of the Bankruptcy Code," Forman said in the complaint.

"The actions of the defendant caused the amount of claims filed against the debtor's estate to rise dramatically as a result of a liquidation rather than a sale of substantially all of the debtor's assets to the defendant."

The trustee is seeking payment of at least $2 million plus interest from Nov. 14, 2011 to the date the judgment is entered, as well as reimbursement of all costs related to the complaint.

Open Range is a Greenwood Village, Colo.-based broadband company that filed for bankruptcy on Oct. 6, 2011. Its Chapter 11 case number is 11-13188.

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