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June 5, 2007

What's behind Amp'd's bankruptcy filing

Posted by Tricia Duryee at 11:10 AM

Last Friday, Amp'd Mobile, the hip mobile phone company backed by the likes of MTV, filed for Chapter 11 bankruptcy protection.

BusinessWeek reported today that a court motion filed on June 4 explains that Amp'd "experienced an unprecedented growth of subscribers" between November 2006 and February after running ads on MTV. The problem: nonpayment.

"About 90 percent of the debtor's customers were on 18-month service contracts," according to the filing. "The debtor began to find a host of credit and collections problems (that) contributed ultimately to a liquidity crisis."

By May, the number of nonpaying customers reached 80,000 -- or nearly half of Amp'd's current customer base of 175,000 subscribers.

On Monday, we ran a Los Angeles Times story on the company's bankruptcy.

Its chief operating officer is Susan Swenson, a former executive at Bellevue-based T-Mobile USA. Swenson was delayed from joining Amp'd until last fall after a judge ruled in 2005 she had violated a non-compete clause by taking a job virtually the same as her T-Mobile position.

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Tricia Duryee
Tricia Duryee
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