iPayOne selling off assets, no longer accepting listings
By ERIK PISOR, The Daily Transcript
Thursday, April 5, 2007
Carlsbad-based ipayOne Inc., a real estate company that offers a 1 percent real estate commission, has announced that as of Wednesday, April 4, it has ceased taking new real estate listings.
Recently the company retained counsel who advised them to enter into a transition known as “assignment for the benefit of creditors,” rather than declaring bankruptcy.
According to Michael Jackman, president and CEO of ipayOne, this approach has been selected because ipayOne’s board believes it will allow the company to maximize the value received out of the liquidation of its assets.
“We simply have run out of cash,” Jackman stated in a letter sent out to shareholders. “The ongoing debt burden and the dramatic downturn in both the real estate and mortgage industries in San Diego were important factors precipitating this decision.”
The company was founded three years ago during a seller’s market period in San Diego’s real estate industry. According to Jackman, the company was very appealing to sellers, however once the market shifted to one that favored buyers the amount of transactions declined notably.
“There’s a disconnect between buyers and sellers,” he said, which results in extended time on the market for an existing home.
According to the San Diego Association of Realtors, the average time on the market for a detached home was 78 days in February 2007, an increase in market time of 10 days when compared with February 2006.
Moving forward, the company’s strategy is to liquidate the Summit assets as a going concern sale through the sale to SIMAC, a corporation owned by Marc Gold and Nick Alameddin. Summit is a wholly-owned subsidiary of ipayOne focused on the mortgage side of the company.
This sale is subject to overbid by anyone wishing to pay more than SIMAC for the same assets.
The other ipayOne assets, such as its name and brand, are also being independently marketed for sale. It is unlikely that there will be sufficient value in the assets to pay anything back to stockholders, according to Jackman.
“I deeply regret that we have come to this point in the history of ipayOne,” he said.
Jackman will remain CEO of ipayOne in order to ensure an orderly transfer of the assets to the assignee. However, day-to-day operations of the company will be managed by SIMAC until the sale of the Summit assets is completed.
The issue of how to work with sellers who are currently marketing a home through ipayOne will be discussed in the near future, he said.
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Protect your assets and always try to avoid bankruptcy by doing a real estate short sale instead.
November 13th, 2008 at 9:12 am
It is not surprising to me that the housing market is getting worse and worse and there looks like no end in sight. I see more and more homes up for sale in my neighborhood and none of them end up selling.
January 3rd, 2009 at 6:39 pm
This becomes a lesson for us not to start a business without accurate analytic data. Many people just count on their felling on running business. Anyway there is no research on property demand so far. Maybe population growth can be a clue.