Bankrupt Slync Has ‘Several’ Parties Interested in IP Asset Auction
Bankrupt supply chain software provider Slync will auction off its intellectual property to recoup some of its losses.
Slync’s board appointed Chicago-based restructuring expert Development Specialists Inc. (DSI) to handle the liquidation after the company filed for bankruptcy last month. Slync transferred its assets to DSI, which will handle their sale and use any proceeds to pay back creditors.
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Interested parties must submit a qualified bid to DSI by Nov. 20. The company has not announced an auction date.
Sourcing Journal reached out to DSI for comment.
DSI is seeking a buyer for substantially all of the assets relating to Slync’s platform, including core applications such as Intelligent Carrier Management, Ocean Booking 360, Inventory in Motion and Air Freight Management.
The firm said it is in discussions with several interested parties and “conducting due diligence.” DSI did not name any potential suitors.
Qualified bids must contain information confirming that the bidder is financially capable to go through with a transaction if selected as the winner, and be able to quickly finalize the deal. Bidders must also sign a mutual confidentiality and non-disclosure agreement, and submit a deposit of no less than 10 percent of the bid.
Court filings state that Slync transferred approximately $440,000 in cash, roughly $476,000 in accounts receivable, and other business assets consisting of the IP, customer agreements and related assets to DSI.
Slync filed for bankruptcy via an alternative proceeding known as an assignment for the benefit of creditors, or an “ABC” petition. The filing states that Chintan Parekh, Slync’s chief financial officer, contacted DSI to discuss Slync’s lower revenue streams and unexpected legal expenses.
The federal indictment of former CEO Chris Kirchner has been the backdrop for Slync’s bankruptcy. Kirchner sued the logistics tech company he co-founded and demanded it pay his legal fees in his dual lawsuits against the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
According to a report from the Journal of Commerce, current Slync CEO John Urban said the company couldn’t grow its business while simultaneously paying legal fees. Urban said Slync couldn’t raise capital from new investors or sell the company due to liability concerns from potential suitors.
Kirchner was indicted in May on charges that he defrauded investors out of at least $25 million. The disgraced CEO faces five counts of wire fraud and eight counts of money laundering. If convicted, Kirchner faces up to 20 years in federal prison per count of wire fraud and up to 10 years in prison per count of money laundering for a maximum of 180 years in prison.
Before Kirchner was indicted, Slync got $24 million in funding from Goldman Sachs, but the company wasn’t able to salvage a business that wasn’t generating revenue. Between 2019 and August 2022, Slync reported a combined revenue of $1.7 million. In the same four-year stretch, the freight tech said its net losses were $3.8 million, $28.4 million, $25.6 million and $21.4 million.
Slync has roughly $1.5 million in unsecured debts, and is preparing a list of known creditors for the court.
Slync’s demise comes as others in the freight tech space have struggled amid a wider freight recession while venture capital funding also dries up.
Those two factors were the primary culprits for the collapse of digital trucking brokerage Convoy, which at one point had been valued at $3.8 billion after raising nearly $1.1 billion in funding.
Flexport, which bought Convoy’s assets, downsized its staff by 1,200 employees in 2023 amid an overhaul that saw founder Ryan Petersen return as CEO. The firm was valued at more than $8 billion in early 2022, but plummeting revenues forced the digital freight forwarder to make drastic cuts and pivot its business to its core freight operations.
Freight booking platform Freightos, on-demand warehousing platform Flexe and supply chain visibility platform Project44 have all cut jobs this year.
Slync was valued at more than $240 million in 2021, offering a platform that automates back-end logistics functions, such as documentation, invoicing and carrier management.
