BuildNet Files for Bankruptcy
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BuildNet Inc., announced Wednesday afternoon that it, along with six of its subsidiaries, has filed a petition for relief under Chapter 11 of the Bankruptcy Code.
The Durham, N.C.-based provider of business-to-business e-commerce solution for the residential construction industry made its filing in the United States Bankruptcy Court for the Middle District of North Carolina. BuildNet's wholly owned subsidiary, NxTrend, based in Colorado Springs, Colo., was not included in the filing.
BuildNet's petition for relief under Chapter 11 comes after Golden, Colo.-based HomeSphere Inc., on July 23 rescinded its offer to merge with BuildNet, after BuildNet failed to reach agreement with its creditors. HomeSphere entered into an agreement to merge with BuildNet on June 20, but said the deal collapsed "due to BuildNet's current financial condition."
BuildNet has been severely impacted by a difficult capital market, and by debt incurred through BuildNet's roll-up of its constituent companies. BuildNet believes that the protections offered by Chapter 11 are necessary to protect the value of the company.
BuildNet intended to raise about $200 million by going public in March 2000 but after e-commerce companies fell out of favor with investors, the company was forced to withdraw the IPO by October of last year.