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Debtors, judge approve ReCellular acquisition plan

Just weeks after entering into receivership, the Michigan-based company ReCellular has been sold to ReCellular Acquisition. Official reports show that the acquisition was completed by a Delaware corporation, but it appears that the parent company is located in Texas. ReCellula Acquisition was able to beat out other competitors on Dec. 12 in an auction for rights to ReCellular. That company was auctioned off after it faced debt problems from a wide variety of creditors.

ReCellular is a 25-year-old company that resells used phones; in its heyday, the company drew in annual revenues of $50 million and employed hundreds of workers.

News reports show that ReCellular had been sued by MidCap Business Credit, as well as NXT Capital SBIC and other creditors. Further, it appears that the company owed unpaid taxes to the Village of Dexter, along with overdue taxes in Scio Township. The amount of money owed to these entities has not yet been released, through industry experts say they expect the debt amounts to be revealed in short order.

The acquisition company appears to be a division of a larger firm that intends to continue ReCellular's operations, perhaps even expanding the business throughout Ann Arbor and other regions in Michigan. ReCellular Acquisition obtained the lion's share of the company's assets, except for cash and some cellphones that are being held for a "Cells for Soldiers" charitable initiative. Sadly, more than 100 employees lost their jobs during the acquisitions process, which began in late October.

In some cases, the only answer to keeping a business viable is to agree to an acquisition. This company appears to have been overwhelmed with debt thanks to complex business transactions. Business attorneys can help corporate owners learn more about their legal rights during mergers and acquisitions, allowing both parties to maximize the outcome of the business transfer.

Source: The Ann Arbor News, "ReCellular sells to Texas-based company for nearly $3 million" Ben Freed, Dec. 13, 2013

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