It’s official: A federal judge issued an order yesterday giving the green light for the financially embattled New York Merchants Protective Co. to be sold to Professional Security Technologies LLC in order to pay off creditors.
The written order by U.S. District Court Judge Denis Hurley describes the asset purchase agreement for the New York-based alarm company—in existence for about 100 years—as “fair and reasonable and in the best interest of the estate.”
The order says the purchase price includes “(a) fair market value for inventory and vehicles, (b) a sixteen (16) multiple for all performing customers of NYMP, New York Merchants Alarm Response, Inc. and NY Merch. Prot. Co., Inc. (the "Sellers"), (c) the ability to procure a substantial upward purchase price adjustment of a fifteen (15) multiple as each of the performing customers become “perfected” (i.e. contracted), and (d) an additional two (2) multiple for those customers who remain performing and but do not become “perfected” customers.”
NYMP has been in the news because Bank of America in January sued NYMP and then-owner Wayne Wahrsager for about $20 million for allegedly defaulting on a loan.
Then, in August, a receiver a judge appointed to oversee the company put it up for sale. Wahrsager, who is no longer a part of the company, has characterized the pending transaction as a “fire sale.” He claims the receiver, who fired him this summer, was mismanaging NYMP.
However, the judge in his order said, “The Receiver has demonstrated good, sufficient and sound business reasons and justifications for entering into the transactions contemplated by the APA (asset purchase agreement), and the APA represents the reasonable exercise of the Receiver's business judgment and the highest and best offer received by the Receiver.” The judge gave the receiver permission to execute the sale immediately to Professional Security Technologies of Nutley, N.J. According to New York state public records, Richard Rockwell is listed as the principal contact for the company. He also is the owner of a Maine company, Main Security Surveillance.
I’ll be reporting more on this story.