Former Hytera seeks approval to sell inventory for $1.2 million

By Sarah Lizee

Olympia, Wash., April 16 – Hytera Communications America (West), Inc. is seeking court approval to sell its remaining inventory to Hytera US Inc., an indirect affiliate of the debtors, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Central District of California.

The proposed sale will transfer the title to the inventory to the purchaser in exchange for about $1.2 million.

Following the pre-petition and post-petition marketing of their assets, the debtors entered into a stalking horse agreement with Hytera US for the sale of a majority of their assets. The sale closed in two steps, on Jan. 12 and Feb. 5, for combined cash consideration of more than $8.1 million.

The January sale transferred the debtors’ distribution network to the purchaser along with certain operating assets and contracts. The February sale transferred the debtors’ “non-accused” assets to the purchaser. Motorola, which objected to the stalking horse agreement, agreed with the debtors to bifurcate the January sale and February sale so that the Illinois district court could determine whether or not to grant Motorola’s request for an injunction.

The Illinois district court denied the injunction, which permitted the debtors to sell all its inventory, whether accused or non-accused. After the denial of the injunction request, the February sale, relating solely to non-accused inventory, was approved.

In connection with the original sale motion and in light of the pending injunction motion in the Illinois district court, the debtors never sought authorization to sell their accused inventory.

“Now that there is clarity regarding the debtors’ sale of accused inventory after the Illinois district court’s denial of the injunction, the debtors, who no longer have an operating business, need to liquidate the remaining inventory, all of which they believe is accused inventory,” the company said in its motion.

To that end, the debtors seek authorization to sell their remaining inventory that, due to the debtors’ intellectual property disputes with Motorola, was previously excluded from the two prior assets sales.

Hytera is an Irvine, Calif.-based communications company. The company filed bankruptcy on May 26, 2020 under Chapter 11 case number 20-11507.

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