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CPM Bankruptcy Update: Some Banking Details

May 19, 2010 in News by Tom Langston (calaggie) | 1 comment

I recently checked again into Central Park Media’s current bankruptcy case and found some new documents from the past month: a Stipulation for Payment of 11 U.S.C. Section 506(c) Expenses and a signed order by presiding judge Shelley C. Chapman approving the sale of the “Anime Channel” trademark, the text of which was basically the same as the Order Pursuant originally submitted in April. Chapman signed both orders on May 3rd.

The Stipulation contains details about CPM’s relationship as a debtor to Bank of America. BofA had lent CPM “approximately $888,651.40″ and holds a lien against them because of that – as of the Stipulation’s filing, CPM owed $924,722.56 inclusive of all accrued interest and fees. The net proceeds from the Anime Channel trademark sale will be distributed to BofA because it was part of CPM’s Estate Assets (basically all their accounts, intangibles and inventory).

BofA then agreed to be “bound by the terms of 11 U.S.C. § 506(c) to pay the reasonable, necessary costs and expenses…of preserving, disposing of, or attempting to dispose of the Trademark subject to BofA’s lien” with the costs not to exceed 40% of the gross proceeds from the sale. If costs did surpass 40% of gross proceeds from the sale, BofA and the Trustee would “attempt to negotiate a reasonable increase to such amount” of the costs. Both parties agreed that the costs will only be payable from the gross proceeds from the trademark’s sale and no costs will be owed if the sale is not approved by the Court.

I hope you don’t mind me not reporting this last week when I first downloaded the documents because frankly, this is not a fast-moving case, the company’s already folded and the subject matter is very dry. I’m mainly doing it because I haven’t seen anyone else digging around for this information.

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CPM Bankruptcy Update: Bid for “Anime Channel” Doubles To $10K

April 24, 2010 in News by Tom Langston (calaggie) | 1 comment

The saga of Central Park Media’s Chapter 7 bankruptcy proceedings continued Tuesday with more documents submitted relating to the sale of the “Anime Channel” trademark (Reg. No. 2,870,643), which I first reported on last month.

The initial sale approval & effective date was to be March 29th but, prior to that date, Griffin Vance contacted the Trustee on behalf of a different undisclosed client. After some negotiation and discussion with the Trustee, Vance tendered an written offer for $8,000 on April 9th, saying his firm “believe[s] this offer reflects a substantial premium over other available offers and would provide an enhanced recovery for stakeholders vis a vis this asset”. Vance’s law office is located in Houston, TX, so that makes me curious if one of the well-known Texas-based anime distributors put forth this counterbid.

On April 16th, the initial bidder represented by Smith Patent Office (“SPO”) expressed their intention to bid $10,000 for the trademark. Vance was informed about the SPO client’s second bid and Vance’s client “decided not to place any higher bids for the Trademark”.

According to the Supplemental Affidavit of Melissa L. Steinberg in Support of Sale of the trademark (the “Steinberg Affidavit”), Bank of America (“BofA”) holds a secured claim against CPM’s estate and that the trademark is included in BofA’s collateral. Therefore, the net proceeds of the sale will be distributed to BofA pursuant to the 506(c) agreement executed by the Trustee and the bank on April 20th. A revised Order Pursuant was submitted with the Affidavit and stated that the Trustee will forward to SPO a Bill of Sale upon the Trustee’s receipt of $9,000 balance due. (A $1,000 deposit check had been sent to the Trustee on March 10th.) The Trustee is seeking Court approval of the sale so it’s not completely done but the deal seems finalized, unless a higher bid is submitted.

One other document submitted in the case was a Certificate of Service signed by Steinberg and notarized by Stephanie Pender on April 20th, certifying that the Supplemental Affidavit had been served by first class mail to the Office of the US Trustee, CPM’s creditors, Smith Patent Office, and Griffin Vance’s law office.

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CPM Bankruptcy Update: Selling A Trademark for Five Grand [Update]

March 19, 2010 in Features, News by Tom Langston (calaggie) | 2 comments

Source: Statement of Use correspondence from trademark application

It has been many months since I last wrote about CPM’s bankruptcy case and Prede of Central Park Media News reminded me of that fact over Twitter a few nights ago. So I went into PACER and saw that there was a “Response Due Date” action filed on March 17th with a March 29th Due/Set date. The related documents detail the sale of U.S. Trademark No. 2,870,643, “Anime Channel”, to “an undisclosed Japanese client” represented by Smith Patent Office for $5,000.

The Motion Pursuant to Bankruptcy Code Section 363(b)(1), Federal Rule of Bankruptcy Procedure 6004(f)(1) and Local Bankruptcy Rule 6004-1(a) to Sell Trustee’s Right, Title and Interest in U.S. Trademark Registration Number 2,870,643 – I’ll shorten it to just Motion Pursuant – reveals the main reason why there has not been an auction announcement yet: “[t]he Trustee’s professionals performed a thorough inventory and analysis of [CPM's assets] and determined that there exists insufficient equity…to make an estate sale of the Assets under current market conditions.” However, the trustee, David R. Kittay, knew some of those assets “might still be of value to particular purchasers” and therefore “remained open to entertaining offers” for them “in whole or in part”.

Regarding the Trademark, the trustee “firmly believes” a private sale, rather than a public auction, is “in the best interests” of CPM’s bankruptcy estate; the trustee hasn’t received any other offers and doesn’t believe “there would be sufficient interest [in it] to justify the expense of marketing and auctioning [it].”

Also among the documents is some correspondence sent from Smith Patent Office (SPO) to the trustee firm Kittay & Gershfield, P.C. According to a December 17th e-mail, the client’s initial offer was for $800. (The Motion Pursuant states the Trustee rejected the $800 offer as too low because “the costs of consummating such sale, including seeking Court approval of such sale, would easily exceed $800.”) After some telephone conversations between the two firms, SPO sent an e-mail on January 22nd to report the client’s offer had risen to $5,000. Finally, a Federal Express was sent on March 10th with a $1,000 check enclosed as a deposit toward the trademark purchase; SPO will provide the remaining $4,000 balance upon Court approval of the sale, according to a Notice of Presentment.

So what will happen next? The Notice of Presentment of the Motion will be served by the Trustee to a number of parties including the Office of the U.S. Trustee, CPM’s counsel, each of CPM’s secured and unsecured creditors, and all parties who have filed a Notice of Appearance in the case. That notice states Kittay will present the proposed order to approve the Trademark’s sale to Hon. Shelley C. Chapman, newly sworn in U.S. Bankruptcy Judge, for signature at noon on March 29.  Any objections to “the relief requested in the Motion” (the $5,000 sale) must be received in writing no later than 10 a.m. that same day.

Background on the Trademark
I’ll conclude this post with some information about CPM’s use of the “Anime Channel” trademark based on documents I downloaded from TESS, the Trademark Electronic Search System. CPM initially applied for the trademark on August 10, 1999, and in a July 10, 2000 response to the Assistant Commissioner of Trademarks, CPM’s in-house counsel Gamal Hennesy provided the following additional information:

  • Anime Channel is a unique portion of the animeone.com web portal.
  • Anime Channel is one of the largest free sites for anime video and audio streams, available in either Real Player G2 configurations.
  • Anime Channel provides trailers of anime programs available in VHS and DVD formats. Prospective customers who access Anime Channel can purchase the VHS and DVD formats of the programs as they view the trailer.
  • The prospective customer for Anime Channel is primarily males and females ages 13 and up who have access to the World Wide Web.
  • The channel of trade for Anime Channel is exclusively the internet and World Wide Web.
  • The words Anime Channel do not have any significance in the anime industry.
  • Anime Channel provides only Japanese animated programming. The subject matter of the programs include various fantasy and science fiction related programs available for sale on VHS or DVD formats.

The trademark registration among the correspondence states CPM first used it in commerce on November 4, 2002 – that date comes from Statement of Use documents signed by CPM president John O’Donnell, stating that it was first used “in connection with the goods at least as early as November 4, 2002″, the goods being. (It seems like an interesting coincidence that ADV’s Anime Network channel was announced soon after on November 6.) An Internet Archive snapshot of the animeone.com home page on February 29, 2000, shows “Anime Channel” in the left sidebar.

So who is this Japanese client buying the trademark and will they actually put it to use? I have a feeling that it could be Kadokawa – there already exists the Anime Newtype Channel website with some Bandai Channel integration and Kadokawa’s YouTube channel is branded “KADOKAWA Anime Channel” – but I’m wondering what other companies might have been that sole interested party.

UPDATE 3/20 2:30pm PDT: Dave of Subatomic Brainfreeze pointed out on Twitter that the YouTube channel Bandai is using to promote Gundam Unicorn is under the account name AnimeChannel. That seems to be an extension of Bandai Channel based on the b-ch.com links in the Gundam video descriptions and Top wo Narae! (aka Gunbuster) videos being region-blocked because they contain content from BandaiChannel, which is a Japan-only service.

I don’t think there would be any problems with that channel’s name and URL because I feel like the trademark being sold may have lost some distinctiveness over the years – FUNimation and Section23 (through Anime Network) have their own video portals along with their own respective YouTube channels and Crunchyroll has developed into a notable simulcast website. If the new owner did decide to enforce the trademark, they would have describe how a particular use by someone else is likely to be confusingly similar to consumers.

I should remind readers that I am not a patent or trademark lawyer so this is just an informed opinion.

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CPM Bankruptcy Update: Abandoning Property (UPDATE)

September 2, 2009 in News by Tom Langston (calaggie) | No comments

It’s been about three months since I last looked into the CPM chapter 7 bankruptcy case and, well, not much has happened.

Two Notices of Abandonment of Property were filed along with corresponding Certificates of Service on July 27th and on August 17th. Here is the main part of the July 27th abandonment document (emphasis added):

PLEASE TAKE NOTICE that pursuant to 11 U.S.C. § 554(a), David R. Kittay, the duly qualified and acting trustee for the estate of the above-captioned debtor [Central Park Media Corporation], intends to and will abandon his right, title and interest in the personal property of the Debtor (described by the Trustee’s professionals as approximately 350 boxes which the debtor’s principal, John O’Donnell, advised would not have any value to anybody, office chairs, computer equipment, office supplies, master tapes, CD’s and DVD rom’s with artwork and samples and old and non-pertinent books and records) located at A Storage Solution, 576 Danbury Road, New Milford, Connecticut 06776 (the “Property”), as burdensome and of inconsequential value to the estate. The estate is currently administratively insolvent and the monthly cost of storing these items is $588. Unless, within fifteen (15) days from the date of service of this Notice, a creditor or other interested party files a written objection and request for hearing with the Clerk of the Bankruptcy Court…and serves a copy of such request on the Office of the United States Trustee, … the Trustee will abandon the Property.

From the August 17th filing (emphasis added):

PLEASE TAKE NOTICE that pursuant to 11 U.S.C. § 554(a), David R. Kittay, the duly qualified and acting trustee for the estate of the above-captioned debtor [Central Park Media Corporation], intends to and will abandon his right, title and interest in the personal property of the Debtor (described as approximately 17,148 media titles contained in approximately 556 boxes) located at Lebonfon Printing, 1051 de l’Echo Street, Val d’Or, Quebec Canada J9P 4N9 (the “Property”), as burdensome and of inconsequential value to the estate. The estate is currently administratively insolvent and the monthly cost of storing these items is $139.00. Unless, within fifteen (15) days from the date of service of this Notice, a creditor or other interested party files a written objection and request for hearing with the Clerk of the Bankruptcy Court…and serves a copy of such request on the Office of the United States Trustee, … the Trustee will abandon the Property.

September 1st was the deadline for filings of Proof of Claims as well as for Objections (to the intents to abandon property) – that was yesterday. Creditors that have filed a Proof of Claim since June 9th include the City of New York Department of Finance and the New York State Dept. of Tax and Finance.

I think the process may be wrapping up its preliminaries but that’s only a guess since I’m not intimately familiar with bankruptcy proceedings. There are no clear dates set for future hearings on the schedule so I’ll continue to check in on occasion and post any updates.

UPDATE 9/3: This story got linked by Anime Vice and I think the term “abandonment” has the potential to be misinterpreted. So I looked at a glossary of terms (PDF) on the website of the U.S. Bankruptcy Court, Southern District of Iowa and that defines Abandonment as “Process by which the debtor’s estate would not benefit by the sale of certain property so the trustee will return it to the debtor” and Abandonment of Property as:

Trustee’s declaration that the trustee has no interest in certain property because of lack of value, debtor’s exemption, or because it is burdensome to the administration of the estate.

So basically those assets that Kittay moved to abandon won’t be going up for auction (at least through this current process) and those items should still be the “personal property” of CPM. I guess I should’ve done a bit more research before hitting the “Publish” button.

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It’s Still Early On In CPM’s Bankruptcy Proceedings

June 9, 2009 in News by Tom Langston (calaggie) | No comments

ANN published a story yesterday about how the liquidation of Central Park Media’s assets is being conducted through MYC & Associates, a New York-based “full service auction, appraisal, liquidation, real estate brokerage & management firm dedicated to obtaining market value for bank owned and court administered assets”. In case you didn’t already know, CPM filed for chapter 7 bankruptcy in late April.

On its listing for CPM, MYC has linked to a Schedule of Assets that contains 23 pages of 547 copyrights relating to releases; two pages of trademarks including “Anime Alley”, “Anime Today”, and “Mangamusic”; office equipment and furnishings such as chairs, computers, and telephones; 12 domain names with expiration dates; a listing of “licences, franchises, and other general intangibles” consisting of four distribution agreements (Warner-Elektra-Atlantic Corporation, Consortium Book Sales & Distribution, KOCH Entertainment Distribution LLC, AD Vision) and one consignment agreement (The Right Stuf International); and a five-page consignment inventory to TRSI.

The components of the Schedule has different dates: the copyrights listing is a draft from 5/23/2006, trademarks listing is a draft from 9/29/2004, domain names from April 7th, and the consignment inventory is as of April 3rd. The distribution agreement with AD Vision was dated March 26, 2009, and was “for distribution of DVDs and related merchandise in Canada and in the United States”. Since then, AD Vision has announced that it would reissue former CPM titles such as Now and Then, Here and There; Grave of the Fireflies; MD Geist; The World of Narue; and Darkside Blues.

My rough understanding of the chapter 7 process is that CPM’s assets will be sold off and proceeds from those sales would be distributed among creditors that have filed a Proof of Claim, showing they are indeed owed money by the debtor (CPM). Even though previously licensed titles are among their assets, it seems they did not have permanent and therefore only the elements that they produced – subtitles, dubbing, and packaging – would be available for purchase. Potential buyers of any intellectual property would still have negotiate with the respective Japanese right holders in order to be able to legally distribute them in North America. (ANN’s list of properties – which at least one site has copy and pasted – includes The Slayers, which is currently being distributed by FUNimation.)

Regarding the court case itself, I decided to sign up for a PACER account so I could do some research and look at the documents that have been filed so far in the U.S. Bankruptcy Court, Southern District of New York. Judge Prudence Carter Beatty is presiding over the case, Raymond A. Bragar is representing CPM, and David R. Kittay is the trustee. The only future scheduled event is a continuance of a Meeting of Creditors (aka 341 meeting) on July 2nd.

The following are creditors that have so far filed a Proof of Claim (deadline is Sept. 1st):
Bank of America
Biblos Co., Ltd./Libre (previously had a dispute with CPM about Be Beautiful manga)
Consortium Books Sales and Distribution (has a distribution agreement)
Cushman & Wakefield, Inc. (commercial real estate firm)
Fisk Building Management
KOCH Entertainment Inc. (renamed E1 Entertainment in Jan. 2009; has a distribution agreement)
Levi Lubarsky & Feigenbaum, LLP (commercial litigation firm)
Moses & Singer (legal services firm)
NCO Financial Systems Inc.
Pittney Bowes Credit Corp.
Quebecor Printing Lebonfon (a Canadian printer)
Wells Fargo
XO Communications Services, Inc.

I also found out that there are two associated cases to CPM’s (09-12530): Binary Media Works, Inc. (09-12532) and Mangamania, Inc. (09-12533), both wholly owned subsidiaries of CPM. Binary Media Works designed some of their web pages (e.g., Grave of the Fireflies) and held some domains in their name including ufocity.com. Mangamania was the name of an online storefront that is still up, searchable, and links to TRSI listings of products.

I’ll keep tabs on this case and post updates with whatever details I come across. Expect those posts to be as dry as this one.

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