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HyreCar To Pursue Sale of Business Under Section 363, Retains Zukin Partners As Investment Bank
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags
partnership
Rhea-AI Summary
HyreCar (OTC: HYREQ) has filed for Chapter 11 bankruptcy in Delaware and motioned for an auction to sell its assets under Section 363 of the Bankruptcy Code. The auction is part of a process to continue operations while pursuing the best offer for its assets. Holmes Motors Inc. is the stalking horse bidder, proposing $7.75 million for the assets and has provided a $5 million debtor-in-possession loan. Interested third parties may bid, with a minimum competing offer set at $8.2075 million. The auction timeline includes key dates from March 13 to May 10, 2023.
Positive
Holmes Motors' bid of $7.75 million provides a baseline for asset valuation.
Debtor-in-possession loan of $5 million offers short-term liquidity.
Negative
Filing for Chapter 11 indicates financial distress.
Uncertainty regarding the approval and outcome of the asset sale.
LOS ANGELES--(BUSINESS WIRE)--
HyreCar (OTC: HYREQ) (“HyreCar” or the “Company”), today announced that it filed with the United States Bankruptcy Court in Delaware (the “Court”) Case No. 23-10259, a motion to conduct an auction to sell substantially all of its assets under Section 363 of the Bankruptcy Code (“363 Sale”), while it continues ordinary operations of the business. The Company has filed a motion with the Court to retain Zukin Partners as its investment bank to seek qualified bidders for the 363 Sale.
On February 24, 2023, the Company filed a voluntary Chapter 11 petition in the Court. On March 2, 2023, the Company executed an Asset Purchase Agreement (“APA”) with Holmes Motors Inc. (“Holmes”) for Holmes to act as a “stalking horse bidder” to acquire substantially all of the assets of the Company for $7.75 million. The APA is subject to due diligence review by Holmes and Court approval. Holmes also provided a Debtor-In-Possession (“DIP”) loan of $5 million, and under the terms of the APA it is entitled to credit bid the $5 million loan against the purchase price.
Third parties will have the opportunity to bid on the assets. An initial competing bid must meet certain conditions set forth in the APA and must exceed the stipulated value of Holmes’s bid of $7,750,000 by at least $457,500. The bidding process is designed to achieve the highest and best offer for the Company’s assets.
The timeline for the auction, which is subject to change by the Bankruptcy Court, includes the following:
Event
Proposed Date
Bid Procedures Objection Deadline
March 13, 2023 at 4:00 p.m.
Bid Procedures Hearing
March 16, 2023 at 11a.m.
Service of Executory Contract Cure Notice
Three (3) business days after entry of the Bid Procedures Order
Deadline for contract counter parties to object to cure
April 7, 2023 at 4:00 p.m.
Bid Deadline
April 27, 2023 at 4:00 p.m.
Auction (if necessary)
May 2, 2023 at 1:00 p.m.
Sale Hearing
May 5, 2023
Sale Closing
No later than May 10, 2023
Zukin Partners will assist the Company in evaluating any bids received, in consultation with the Company and its other advisors and as overseen by the Court.
“We believe that a robust sale process will expedite the Chapter 11 proceedings and allow the Company to execute on management’s clear vision and plan for HyreCar's future,” said Jim Zukin, founder and managing partner of Zukin Partners.
Parties interested in the 363 Sale process may contact Ari Schottenstein at Zukin Partners at ari@zukinpartners.com or 424-317-0178. Interested parties must sign a confidentiality and non-disclosure agreement to gain access to confidential detailed due diligence materials, and must demonstrate financial ability to be considered qualified bidders.
HyreCar is represented by Greenberg Glusker LLP in Los Angeles, and Cole Schotz as Delaware counsel.
About HyreCar
HyreCar Inc. (OTC: HYREQ) is a national carsharing marketplace for ridesharing, food, and package delivery via its proprietary technology platform. The company has established a leading presence in Mobility as a Service (MaaS) through individual vehicle owners, dealers, rental agencies, and OEMs that wish to participate in new mobility trends. By providing a unique opportunity through a safe, secure, and reliable marketplace, HyreCar is transforming the industry by empowering all to profit from Mobility as a Service. For more information, please visit hyrecar.com.
About Zukin Partners
Zukin Partners is a strategy-led investment bank based in Los Angeles CA managed by Houlihan Lokey Co-Founder Jim Zukin. Zukin Partners acts as a sell side, and buy side strategic advisor in M&A, restructuring, and special situations. Leveraging its financial advisory expertise Zukin Partners offers its client base valuation, strategic advisory, and QofP services in addition to its transaction execution services. The firm is spun out of Zukin Capital, the Zukin Family Office.
Forward-Looking Statements
This press release includes statements that are, or may be deemed, “forward-looking statements.” In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or, in each case, their negative or other variations thereon or comparable terminology, although not all forward-looking statements contain these words. These forward-looking statements reflect the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained herein. Any forward-looking statements that we make in this press release speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. HyreCar’s forward-looking statements in this press release include, but are not limited to, statements about HyreCar’s plans to sell its assets pursuant to Chapter 11 of the U.S. Bankruptcy Code and the timing of such sales and ability to satisfy closing conditions; HyreCar’s intention to continue operations during the Chapter 11 case; HyreCar’s belief that the sale process will be in the best interest of HyreCar and its stakeholders; and other statements regarding HyreCar’s strategy and future operations, performance and prospects, among others. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting HyreCar will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond HyreCar’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the risks associated with the potential adverse impact of the Chapter 11 filings on HyreCar’s liquidity and results of operations; changes in HyreCar’s ability to meet its financial obligations during the Chapter 11 process and to maintain contracts that are critical to its operations; the outcome and timing of the Chapter 11 process and any potential asset sale; the effect of the Chapter 11 filings and any potential asset sale on HyreCar’s relationships with vendors, regulatory authorities, employees and other third parties; possible proceedings that may be brought by third parties in connection with the Chapter 11 process or the potential asset sale; uncertainty regarding obtaining Bankruptcy Court approval of a sale of HyreCar’s assets or other conditions to the potential asset sale; and the timing or amount of distributions, if any, to HyreCar’s stakeholders.
