Telcom USA

Division: Phoenix Management Services


Telcom USA was a manufacturer and distributor of plastic flowerpots based in Lawrence, MA.


Having been hobbled by years of litigation between Telcom SpA, an Italian corporation and 50.5% shareholder of Telcom USA, and the Company’s minority shareholder-Telcom USA made the decision to liquidate the business through an Assignment for the Benefit of Creditors, whereby all of the ownership rights of the company’s assets would be assigned to an assignee, whose sole responsibility would be to liquidate the assets for the benefit of the company’s creditors. PMCM, LLC, an affiliate of Phoenix Management Services agreed to serve as Assignee for the Benefit of Creditors of Telcom USA. Two immediate issues facing the Assignee were: (a) determining whether Telcom USA’s operations should continue, and (b) addressing potential foreclosure on substantially all of Telcom USA’s assets by the senior creditor, which held a first lien on those assets.

Telcom USA had insufficient capital to continue operations through the seasonal build up of inventory during the fall and winter, and through the spring selling season. In the absence of a feasible prospect to sell Telcom USA as a going concern within the brief period before its funds were exhausted, PMCM as Assignee determined that immediate cessation of operations was in the best interest of Telcom USA’s creditors.

During the course of the Assignment for the Benefit of the Creditors, the minority shareholder, a major creditor of Telcom USA, moved to appoint a Receiver within the Superior Court of Massachusetts. Since PMCM as Assignee had successfully wound down all of Telcom USA’s operations and liquidated substantially all of the Company’s assets (with the exception of the Real Estate), the Superior Court of Massachusetts appointed PMCM to serve as the Receiver for Telcom USA. Under the Receivership, the Superior Court of Massachusetts oversaw PMCM’s actions during the sale of the Company’s Real Estate, the reconciliation of claims filed against the estate, and negotiation and final resolution regarding litigation involving Telcom USA and its shareholders.


With the goal of pursuing an orderly process to maximize value for the benefit of the company’s creditors, PMCM acted as both Assignee and Receiver with the support of the senior creditor to fund the liquidation from cash collateral.

Over the next 2 years, PMCM proceeded to perform the following in order to orderly conclude closure of Telcom USA and maximize the potential recovery to the creditors:

  • Developed and executed a detailed and comprehensive liquidation plan that saw the secured creditor paid in full within 4 months into the liquidation
  • Facilitated the collection of AR, sale of inventory and the auction of equipment and Real Estate
  • Assisted in the negotiation and settlement between Telcom USA’s two shareholders that held major claims against the estate
  • Performed an exhaustive, detailed review of approximately 130 proof of claims and lead the negotiation and approach to identifying and resolving disputed and duplicate claims
  • Prepared Schedules and Monthly Operating Reports

During the course of the assignment process, PMCM was able to reduce the claims against the estate by 72%, while resolving numerous litigation actions against Telcom USA without any cash payments. The final outcome of the sale of Telcom USA’s assets and negotiation of major claims against the estate was payment in full to all secured, administrative and priority creditors, and a $0.45 dividend on the $1 distribution for the unsecured creditors. The final solution was a process that maximized the value of the recovery to the company’s creditors and provided a vehicle whereby PMCM, LLC in serving as both assignee and receiver provided significant value in the overall recovery process of the estate.