Daily News: February 23, 2012

CyberDefender Files Chapter 11; GR Match to Provide DIP, Buy Assets

CyberDefender Corporation, a provider of direct-to-consumer remote technical support services, Internet security software and utilities, announced that it has entered into an Asset Purchase Agreement (APA) with GR Match, LLC, an affiliate of Guthy-Renker LLC, to sell substantially all of its assets to GR Match. Guthy-Renker is one of the largest direct marketing companies, with distribution of products throughout the world.

In order to facilitate the sale transaction contemplated by the APA and establish a sale process for the receipt of higher and better bids, the company has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

The company emphasized that its daily operations, including software, data storage and LiveTech remote technical support services, would continue without interruption during the sale process.

GR Match, LLC has also committed to provide up to $4.6 million in debtor-in-possession (DIP) financing to facilitate the transaction and sale. This financing, subject to Bankruptcy Court approval, will allow the company’s operations to continue normally while completing the sale. This additional liquidity will enable the company to satisfy customary obligations associated with the daily operations of its business, including the timely payment for post-petition services, employee wages and other obligations.

In conjunction with the Chapter 11 filing and pursuant to Section 363 of the Bankruptcy Code, the company will file a motion for the establishment of bidding procedures to allow other qualified bidders to submit higher and better offers for its assets.

XRoads Solutions Group, LLC serves as financial advisor to the company and Pachulski Stang Ziehl & Jones LLP serves as bankruptcy counsel.