BroadSign Files For Chapter 11 Bankruptcy Protection

BroadSign International has filed Chapter 11 bankruptcy papers in a Delaware court, seeking protection from creditors.

Technically based in Boise, Idaho but in operating terms a Montreal company, the SaaS software company focused on digital OOH networks has debts listed of between $10 million to $50 million and assets of $1 million to $10 million, according to a report by Bloomberg News.

“The most effective way to maximize the value of their estates for the benefit of creditors is to complete a prompt sale of substantially all their assets,” says BroadSign CEO Brian Dusho in the filing.

BroadSign and its affiliates are insolvent and income is “insufficient to continue their operations without an infusion of further capital,” Dusho said. The company will seek court approval to borrow as much as $328,295 to help fund operations until it completes the sale.

BroadSign and two affiliated companies owe their 20 largest unsecured creditors about $2.3 million, with Olton Management the largest at $1.3 million claim. That is probably (but guessing) for office space, possibly at the old offices.

Not all that surprising.

I was at BroadSign when it was a high flying company with a big marketing budget, and still there as the recession hit, layoffs started and budgets contracted. I wondered when I left how long the company would be around but it has been three years and they’re still kicking. It helps, of course, that the product is very, very solid in what it does and has some big Tier 1 users like JC Decaux.

But it has been held together largely by a single investor and efforts to get acquired didn’t play out. BroadSign got a nice cash infusion via LG when it built what was launched as SignNet, but LG then changed course, gutted its US digital signage team, and the arrangement sputtered.

Bankruptcy protection does not have the same stigma it once had, and is a not uncommon tool to get out from under debt and troublesome structure. BroadSign has several people here in Las Vegas for DSE and will no doubt be doing their best to manage the message.

I chatted with Dan Parisien, VP of Marketing and Strategy and a guy who has been with the company for-e-ver, and he said it really is a case of business as usual. Clients and business partners were all made aware of the situation and are comfy, and the company has been steadily growing in terms of revenue the last three years.

The way this sets up the far most likely scenario is that BroadSign’s principal investor Burr Smith picks up the company in the bankruptcy auction process. Once that is done, the company is in a far superior position to raise new money – without legacy debt that would tend to scare off investors in the last couple of years.

Digital OOH will remain the bread and butter of the company, but Dan said there other plans on the near horizon … Which sounded interesting but I can’t repeat for pretty obvious reasons.

There are a lot of good people at that company, and the platform is well respected. I hope they come out of this process revitalized, but they invariably face a big challenge in that the product is packaged for Digital OOH networks and that’s a sector that is growing in size but shrinking in terms of the number of companies of any real size and scale. You have companies like Zoom that were with BroadSign but took the technology in-house.

On the plus side, the company is winning deals in markets that at not as mature and are needing industrial strength media targeting and delivery that they could not or don’t want to build. There is also a lot of activity in the replacement market right now, with existing suppliers being punted because of changes in pricing and contract terms.

There are at least two other notable software companies said to be on very shaky ground, and probably can’t navigate their way through this process as BroadSign is doing, and something may give within weeks with those.

Dave Haynes

Dave Haynes

Editor/Founder at Sixteen:Nine
Dave Haynes is the founder and editor of the Sixteen:Nine blog. He is a well-known figure in the digital signage and Digital Out Of Home sectors and runs a pair of companies, The Preset Group and pressDOOH.
Dave Haynes

@sixteennine

Long-running blog about digital signage, DOOH and emerging media, by industry consultant and shit-disturber Dave Haynes
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