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Renamed Piksel, KIT digital to exit bankruptcy protection, sues spin-off

Following its filing for Chapter 11 voluntary bankruptcy protection three months ago "to cleanse itself of legacy issues, including financial, legal and regulatory matters," video asset management solutions provider KIT digital said its reorganization plan has been 'confirmed' by the US Bankruptcy Court for the Southern District of New York.

Upon emerging from bankruptcy, KIT digital will rebrand on 29 August as Piksel, and relaunch at the forthcoming International Broadcasting Convention in Amsterdam next month. "Piksel's new leadership team remains in place and is focused on a number of new initiatives and opportunities that will create value for customers and shareholders," says the company.

KIT digital's 'transformational' saga is not yet over. Creditors have been protesting the bankruptcy rescue plan - a $25 million deal with investment funds that would take over nearly 90% of its ownership - over payments that they said could unfairly flow to shareholders even if the company's unsecured debts aren't paid off first. The Dow Jones Daily Bankruptcy Review reports that some shareholders complained KIT digital received better purchase offers than the $25 million bid - somewhere between $62 million and $92 million.

More trouble is brewing. KIT Digital has launched legal action against utd. by content, claiming breach of contract over the latter's $18.8 million buyout of the company's content solutions business last year.

In June 2012 with little fanfare, Content Solutions International N.V. acquired KIT digital's content solutions business for $18.8 million, comprised of an initial cash payment of $1 million and a $17.8 million multi-year earn-out payment obligation based on revenue achieved. In January 2013, Content Solutions International changed its name to utd. by content.

"We know that utd. by content has customers and is generating revenue. We also know that utd. by content is choosing to ignore its obligation to pay KIT digital a percentage of its revenue as an earn-out payment," said Fabrice Hamaide, Chief Financial Officer of the Company. "The complaint we filed seeks to reverse the transaction, effectively returning the assets of utd. by content to KIT digital since none of the promised $17.8 million in earn-out payments have been made."

Story filed 10.08.13

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