Phoenix Payment Systems, a processor of credit card and electronic check transactions, filed Chapter 11 and said it plans to sell the company to stalking horse bidder North American Bancard unit EPX Acquisition that offered $50 million which, according to bankruptcy court documents, is sufficient to pay all undisputed creditors in full and provide a substantial recovery for the debtor’s equity security holders.

The debtor is seeking court approval for $5 million in DIP financing from pre-petition lender and credit card sponsor The Bancorp Bank.

According to bankruptcy court documents, Phoenix owes its sponsor bank, Bancorp, in the aggregate, $6.2 million under a pre-petition credit agreement. In exchange for Bancorp’s agreement to continue to forebear from exercising its remedies under its agreements, Phoenix agreed to enter into a deal with a purchaser/investor that would be reasonably acceptable to Bancorp.

The bankruptcy court documents show that Phoenix Management Services’ Michael E. Jacoby is the chief restructuring officer of the company. Raymond James & Associates is acting as investment banker and financial advisor.

As of the petition date, the debtor had total outstanding liabilities and other obligations of approximately $16.6 million. The company has been “cash flow insolvent” since at least December 2013 and could not meet its debts as they came due without funding from Bancorp, which Bancorp was not required to provide, the bankruptcy court documents said.