Struggling Global Axcess Corp. announced Tuesday morning it has filed for Chapter 11 bankruptcy reorganization but has a deal in place to sell its main business.
Global Axcess, which operates automated teller machine networks, agreed to sell the assets of that business to Financial Consulting & Trading International Inc., a California-based company that also provides ATM services.
Jacksonville-based Global Axcess also operated a network of DVD kiosks, but that business is not included in the agreement. The company said Tuesday it intends to sell its remaining DVD assets in a separate process.
With the bankruptcy filing, the agreement with FCTI to buy the ATM business is contingent on no higher bids coming in during a court auction process. FCTI agreed to pay about $10 million.
Global Axcess filed its Chapter 11 petition Monday in U.S. Bankruptcy Court for the District of Nevada. Although the company's main office is in Jacksonville and it has two smaller offices in South Carolina and Texas, according to its annual report, it is incorporated in Nevada.
The bankruptcy petition lists $9.2 million in assets and $19.3 million in debt.
In a Securities and Exchange Commission filing Tuesday, Global Axcess said Kevin Reager had resigned as CEO but remains president of the company.
The filing also said David Bagley was hired as chief operating officer. Bagley is managing director of MorrisAnderson & Associates, Ltd., a consulting firm for financially distressed and underperforming companies.
Global Axcess announced last fall that the company was up for sale. In its first-quarter report this year filed with the SEC, the company said it was getting out of the DVD business and that its major client in that business was terminating its contract.
Global Axcess reported a $12.1 million loss in the first quarter. It also said in that report that the company had negative working capital and that it "may be forced to seek relief through a filing under the U.S. Bankruptcy Code" if it could not raise additional capital.
Global Axcess' stock, which trades on the OTC Bulletin Board, has been listed at 4 cents for the past two weeks.
Global Axcess said in a news release Tuesday that its ATM business will continue operating without interruption as it goes through the Chapter 11 process.
Global Axcess said the sale to FCTI will allow the business "to emerge with the strong financial backing of a new owner with substantial experience in the ATM industry."
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