On Tuesday, MoviePass’s parent company, Helios and Matheson Analytics filed for Chapter 7 bankruptcy through the Securities and Exchange Commission.
In the filing, the company reported that it owes as much as $1.2 million to customers.
“As a result of filing the Petition, a Chapter 7 trustee will be appointed by the Bankruptcy Court to administer the estate of the Company and to perform the duties set forth in Section 704 of the Code,” the SEC filing stated, meaning that MoviePass’ assets will be sold to recover the money owed.
The Wrap reported that shares of Helios and Matheson dropped by about 83% on Tuesday. At the same time, Prathap Singh, Gavriel Ralbag, Muralikrishna Gadiyaram and Joseph Fried resigned from their board positions, while Parthasarathy Krishnan also resigned as the interim CEO and Robert Damon resigned as interim CFO.
MoviePass shut down in September 2019 after reports of the company struggling financially had been coming out consistently since the service’s launch. At that time, MoviePass sent a letter to subscribers, which included this statement.
While we were able to relaunch the service for some of our subscribers with an improved technology platform, our efforts to recapitalize the company have not been successful to date. As a result, it pains us to inform you that effective at 8 a.m. E.T. on September 14, 2019, we must interrupt service for all current MoviePass™ subscribers. MoviePass™ will be providing subscribers with appropriate refunds for their period of service already paid for. Subscribers will not need to request a refund or contact MoviePass™ customer service to receive a refund. Subscribers will not be charged during the service interruption. At this point, we are unable to predict if or when the MoviePass™ service will continue.
After shutting down in September, Helios and Matheson said they would be exploring financial opportunities for the company. Options, according to MoviePass, included “a sale of the company in its entirety, a sale of substantially all of the company’s assets including MoviePass, Moviefone and MoviePass Films, a business reorganization or one or more other extraordinary corporate transactions, together with the assumption or settlement of the Company’s liabilities in connection with any of these alternatives.”
Unfortunately, the company could not recover from “security issues” and claims of fraud.
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