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Fri Nov 20 2009 16:48:38

uBid Sellers Worried over Enable Holdings' Financing

By: Ina Steiner

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There have been recent reports from third-party sellers on uBid who complain of late payments from the marketplace. Enable Holdings, parent company of uBid, has been trying to arrange financing. Today's SEC filing show the issue remains serious.

According to the filing, a $500,000 loan in the form of 2009 Convertible Promissory Notes provided by Hdibu LLC, Theodore Deikel and Talos Partners LLC on October 9, 2009, is due on November 30, 2009. From the filing:

The Company is negotiating a financial restructuring with its secured and unsecured creditors which is being done at the same time the Company is attempting to secure further financing.  There is no assurance the Company will be successful with the financial restructuring. If the Company is not successful, substantial doubt exists as to its ability to continue as a going concern.

The full Form 10-Q for the period ended September 30, 2009 is available online. It's not clear how long the company has to get its financing in order. Enable Holdings' CEO Jeff Hoffman was not immediately available for comment.

Third-party sellers on uBid.com fulfill customer orders and had generally been paid weekly by uBid, which processes customer payments. We'll update this blog post as we learn more.

Updated December 30, 2009: See AuctionBytes Newsflash article from December 30 for latest news on resignation of Enable Holdings CEO.

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Readers Comments

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Sam

Fri Nov 27 17:15:44 2009

The real truth is, if they file Bankruptcy all secured debt becomes due immediately , negotiations stop and yes the vendors (unsecured debt) will eventually get paid out 5-10 cents on the dollar a year down the road . It would immediately stop the on-going site operations . So that is the nuclear option at this point .

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: BestDayEver

Sat Nov 28 00:13:43 2009

"Then the assets of the company would be liquidated by a trustee and the unsecured creditors would be paid from that money."

What assets? Not even sure the IP they may own is worth much.  

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: unfortunate truth

Sat Nov 28 01:30:15 2009

Assets? What assets can they possibly own.  I'm sure any inventory they owned has been sold months ago.  Any current inventory is probably secured debt.  You need cash to buy inventory.  In this economy with this company, nobody would give an inventory line of credit without it being secured.

So I agree, if sellers were to force ubid into bankruptcy, they'd be shooting themselves in the foot (I mean pocket).

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: BestDayEver

Tue Dec 1 10:26:15 2009

ENAB.OB is trading for 20 cents today.

Twenty cents.

Has not seen the positive side of a dollar for over a year.

How has the upper management/overpaid executives stayed put? Does the board not see what is going on?

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Sam

Tue Dec 1 10:41:25 2009

The board is sleeping , all Management should be terminated and replaced, all board members should be kicked out by the stockholders, but that cannot happen because most stock is owned by 3 people , they are not making current payments to vendors as was promised ,I feel they are trying to keep the doors open until Christmas than shut everything down and never pay the vendors .

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Jan

Tue Dec 1 16:12:55 2009

I pulled everything off uBid a week ago after I got a canned e-mail from my account manager in response to an inquiry from me on why I hadn't received a check.  I'm not losing anymore money on the site.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Sam

Tue Dec 1 18:04:09 2009

Do they owe you past due money ?

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

This user has validated their user name. by: Ming the Merciless

Tue Dec 1 22:29:30 2009

Unless uBid sellers enjoy losing money or need losses for tax purposes, pull your merchandise off this site. The probability of getting 100% of sales is about nil and you could lose everything.

Other creditors and their lawyers will be so far ahead of an uBid seller that you'll be very, very lucky to get tgen cents on the dollars if that.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Jan

Wed Dec 2 05:40:10 2009

uBid owes me for the 11/8/09 ending period; a little over $1200.  I'm sure not nearly as much as many will lose.  They also owe me $550 for the 11/26/09 ending period...we'll see if that check comes as promised.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Sam

Wed Dec 2 08:00:41 2009

Ubid stated that were paying out current money for sales past Nov 9 forward on a weekly basis , every Friday , you should have received money on Nov 16 , Nov 23 and Nov 30

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Jan

Wed Dec 2 12:04:55 2009

I got a check dated 11/11 and 11/17.  The one in my remittance report dated 11/26 has not arrived. The other check I didn't receive was dated 11/8 and was for 10/18-11/8.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Sam

Wed Dec 2 12:22:51 2009

Have you talked to anyone in the last week about the Money ? If so what did they tell you about missing the payments ? If you have a direct email we can discuss it further .

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: BestDayEver

Wed Dec 2 12:23:47 2009

Good luck on getting your funds. uBid has always run business on a shoe string budget model, and that shoe string is stretched so tight it just might break any moment. They have management that has more than enough experience shutting down companies, so it should be quick and painless. Except for those losing money, of course.

Good luck.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: paw

Wed Dec 2 12:58:35 2009

Letter from Ubid CEO


Dear Valued Partner:



Over the past 6 months we have been working to restructure our operation. The restructuring and a financing are necessary to keep the operation on going. Without restructuring and financing we will not be able to continue operating. If we are unable to restructure and secure financing we will be forced to file bankruptcy and your unsecured debt will most likely not be paid. We have moved our corporate office into a multi use facility in Itasca allowing us to operate our own facility and reduce both rent and costs from our third party warehouse. We have consolidated our data center and negotiated new rates. We have reduced staff and asked our team members to reduce their salaries all of whom have done so to help the company through these unprecedented economic times. We have reduced our monthly overhead costs with these changes from $1.2 million to approximately $400,000. A 66% cost reduction. We continue with our cost reductions and as we consolidate our call center and implement other projects we expect to lower costs to an amount under $300,000 a month or another 25%.



We have successfully negotiated with all of our secured lenders to restructure and settle their existing debt at substantially reduced amounts of over 80% of the original debt. Our largest unsecured lender has agreed to a repayment plan that spans some 12 months. The final part of our restructuring plan is to obtain financing to execute on our plan. As many of you know our country’s current economic climate has made obtaining financing difficult to say the least. We filed an 8-K with the Securities and Exchange Commission two weeks ago which indicated that we have secured financing with a group of investors. Unfortunately, we have not been able to close on this financing.



While we are fortunate to have several other parties interested in financing, this will require time as investors need time to complete their due diligence and prepare contracts. We are asking you to grant us a delay to pay the approximately $2.0 million in unsecured debts currently due for a period of 45 days. All debts from Friday November 7, 2009 and prior will start to be paid no later than January 1, 2010. We intend to make these payments over an eight month period monthly, payable on the last day of every month.



We intend to make payments for transactions after November 9, 2009 on our normal payment schedule. We need this period of time to secure financing and finish our restructuring. The alternative would most likely result in liquidation and no payment to unsecured creditors. We feel that this is the best alternative available to us for all of our partners.



We hope to inform you soon regarding the successful completion of a financing.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: BestDayEver

Wed Dec 2 22:52:43 2009



Interesting. Wonder if the CEO, CFO,VP's and Directors had to reduce their salary as well.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: sam

Wed Dec 2 23:45:48 2009

That letter is a joke , they did not even keep the promise to pay current sales , they already missed a payment after one week . This is getting to be pure fraud . I think the IL Attorney Generals Office and the SEC should start investigating here

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: ubid seller

Thu Dec 3 12:00:44 2009

paw - how did you receive this message?  It wasn't in our UCM - was this a direct email?

Based on this message, I guess we can expect to see the remainder of our payments sometime in Q1 2010.  Or not.

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: paw

Thu Dec 3 12:41:19 2009

We received it from some investors,I would not gaurantee anything they are saying in that letter , except bankruptcy is a possiblility . We have been informed on this blog that they already have missed current payments to vendors. So that is NOT a good sign .

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Jan

Thu Dec 3 19:03:19 2009

Sam, I e-mailed my account manager yesterday and she said my last check (11/26) has not been mailed out yet but she'd let me know when it is.  I don't think it'll happen.

ubid seller, I got the same letter as paw.  It came from my account manager when I inquired about the "missing check".

uBid Sellers Worried over Enable Holdings' Financing   uBid Sellers Worried over Enable Holdings' Financing

by: Sam

Thu Dec 3 19:54:20 2009

I have heard from other vendors that they are not paying out weekly as stated in the new plan . But they keep bringing in cash everyday with current sales, so that money is going somewhere .

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