Earlier this month, bankruptcy officials worked to auction off what was left of TSR Wireless L.L.C., which was the nation’s largest privately held paging carrier before it filed for Chapter 7 bankruptcy in December. The auctioneers had hoped to raise enough money to pay back the more than $200 million TSR Wireless owed to a variety of banks.
It didn’t quite work out that way.
“The auction produced a value that was disappointing to say the least, but indicative of the current market,” said James Harris, president and owner of Seneca Financial Group Inc., which TSR Wireless’ bankruptcy trustee hired to assist with the asset auction.
All of TSR Wireless’ assets, including its one-way paging business and its two two-way nationwide messaging licenses, sold for a total of about $12.2 million.
“All things considered, we think the outcome was good,” Harris said.
The auction of TSR Wireless’ two two-way licenses, informally known as the channel 4 and channel 15 licenses, was held March 20. TSR Wireless owned the licenses but had not yet begun building a network. Harris said 13 people signed confidentiality agreements to participate in the auction. SkyTel Communications Inc., which is owned by WorldCom Inc., bought the channel 15 license for $2.6 million, which comes as no surprise to many industry observers who see SkyTel as one of the nation’s most successful two-way messaging companies. Officials from SkyTel did not immediately return calls for comment.
Two-way messaging company Space Data Corp. purchased TSR Wireless’ other two-way license for $3.6 million. Space Data was founded in 1997 and plans to be a “carrier’s carrier,” providing services in rural areas. A company official said the license purchase represents a big move for the company, which plans to publicly introduce its services in the next few months.
Network Services L.L.C., a regional paging carrier with services in Arizona, Nevada and California, paid $6 million for all of TSR Wireless’ one-way paging assets. This includes TSR Wireless’ local, regional and national 900 MHz frequencies, the company’s 1,400 one-way paging transmitters and its administrative operations. Harris said 48 people signed confidentiality agreements to participate in the auction of TSR Wireless’ one-way network, which was held March 23.
According to Network Services, the U.S. Bankruptcy Court in Newark, N.J., approved the asset purchase, and Network Services will manage the assets until the Federal Communications Commission issues a final order to transfer TSR Wireless’ one-way paging licenses.
Brad Scott, Network Services’ president, said his company will also hire on about 50 former TSR Wireless employees who have been working since December to keep TSR Wireless’ network up and running.
“We’re excited about the opportunity,” he said.
Perhaps the most important part of TSR Wireless’ assets is its customer base, which-according to RCR Wireless News’ Top 20 Paging Carrier list published in July-totaled about 2.6 million. Scott said it’s unclear how many customers remain on the network, but he said the two companies combined boast almost 2 million customers.
“We’re really working hard to do cleanup,” he said. “Right now we’re really working hard to retain customers’ faith in the service and to ensure that we will continue to provide reliable service.”
Network Services is a five-year-old company based near Los Angeles. Before the auction, it provided paging services through about 300 transmitters. It also offers unified messaging and advertising-driven paging services.
“We’ve actually been looking for a strategy to take our services nationally,” Scott said. “When TSR came along, it was a perfect opportunity to go nationally.
TSR Wireless filed for Chapter 7 bankruptcy Dec. 8 in New Jersey, a week after it turned away its 1,700 employees and closed its more than 275 retail stores. Chapter 7 is the most severe type of bankruptcy and calls for the liquidation of all the company’s assets.
