A chain of events over the last month does not bode well for the continued existence of the no-credit-check, allegedly scammy computer purveyor BlueHippo. When the FTC found the company in contempt of its agreement to stop scamming people, Bluehippo’s payment processor froze the company’s funds with little notice. The company was unable to pay its bills and filed for Chapter 11 bankruptcy. Now, the company has changed to a Chapter 7 filing (liquidation) and will most likely go out of business.
BlueHippo had sought bankruptcy reorganization protection last month when its payment processor’s bank unexpectedly blocked its funds, leaving the company unable to pay creditors. BlueHippo petitioned a Delaware bankruptcy court judge to allow the funds to be released to the company, but its request was denied on Dec. 2, according to court records.
Without access to the funds held by Checkgateway LLC, BlueHippo “will not be able to satisfy administrative expenses that will continue to accrue if these cases are maintained in Chapter 11 [reorganization],” according to the filing. The company has a bankruptcy court hearing on its Chapter 7 motion on Dec. 23.
Note the conspicuous lack of crying consumer advocates. Let’s hope that this is one brand that doesn’t rise back up as a zombie hippo.
BlueHippo files Chapter 7 bankruptcy [Baltimore Sun] (Thanks, Steve!)
BlueHippo Files Chapter 11 After Bank Accounts Frozen
FTC Files Contempt Charge Against BlueHippo For Continuing To Rip Off Customers
Scammy Computer Seller BlueHippo Settles With FTC For $5 Million