The parent company of Foreclosure.com and a stable of more than 150 other Web sites says its doors will remain open after two lawsuits forced it to file for Chapter 11 bankruptcy protection.

Companies filing for Chapter 11 bankruptcy protection typically propose a plan of reorganization to keep their business alive and pay creditors over time.

That’s the case with FFS DATA Inc.’s Dec. 23, 2009, Chapter 11 bankruptcy petition, said Bradley Shraiberg, the attorney representing the Boca Raton, Fla.-based company.

The parent company of Foreclosure.com and a stable of more than 150 other Web sites says its doors will remain open after two lawsuits forced it to file for Chapter 11 bankruptcy protection.

Companies filing for Chapter 11 bankruptcy protection typically propose a plan of reorganization to keep their business alive and pay creditors over time.

That’s the case with FFS DATA Inc.’s Dec. 23, 2009, Chapter 11 bankruptcy petition, said Bradley Shraiberg, the attorney representing the Boca Raton, Fla.-based company.

Shraiberg said FFS, which listed $27.51 million in liabilities against $9.08 million in assets, has the cooperation of its primary lender, Fifth Third Bank of Cincinnati, in its reorganization plan.

"We are hoping that the filing of this bankruptcy will be seamless, and that users (of Foreclosure.com and other company Web sites) will not notice any change in service," Shraiberg said. FFS "will only be stronger" for having filed the petition, he said.

Chapter 11 reorganization would allow FFS company to pay "liquidation value" on any allowed claims of unsecured creditors, the company said, which often amounts to pennies on the dollar.

In the meantime, FFS is seeking court approval to maintain a merchant credit card service agreement with Fifth Third Bank, and obtain post-petition financing that would the company to continue paying its bills.

FFS pays about $300,000 per month to a group of 55 contract employees, the company said in court filings, and Shraiberg said the company continues to make payroll.

According to its bankruptcy court filings, FFS has been "cash flow positive," generating about $16 million a year in revenue in each of the past two years.

But the expense of defending two lawsuits — one a dispute with two former partners in the company, the other with former Foreclosure.com data provider First American CoreLogic — has created "severe cash flow issues," the company said.

FFS expects to be in the red during the first quarter of 2010, spending at least $100,000 more than it takes in each month.

Revenue is projected to grow from $1.1 million a month in January to $1.26 million in March. But the company said much of that revenue will be eaten up by revenue sharing and "cost per click" agreements with search engines like Google and Yahoo, which are expected to grow from $475,000 a month in January to $651,000 by March.

Gross profits of just over $600,000 per month will be outweighed by monthly operating expenses of $730,414, the company said in a 90-day cash-flow budget.

The bulk of those expenses — $578,750 — are earmarked for consulting expenses, most of which are to be paid to two companies for which FFS president Bradford Geisen is listed as an officer or director: Active Data Technologies Inc. and Active Data Group Inc. Active Data Technologies and Active Data Group are also listed as unsecured FFS creditors that are owed more than $270,000 by FFS. …CONTINUED

Fifth Third Bank is listed as the company’s largest unsecured creditor, with a $17 million guaranty note. FFS also owes Fifth Third on a $1.75 million bank loan — the company’s only secured debt.

Another company controlled by Geisen, Live Data Group Inc., filed for Chapter 11 bankruptcy protection on the same day as FFS.

The Chapter 11 proceeding of Live Data Group, which listed $5 million in consulting revenue in 2009, will be jointly administered with FFS’ petition, the U.S. Bankruptcy Court for the Southern District of Florida ruled Dec. 28.

Greg Sullivan, who is involved in a legal dispute with Geisen over his stake in Foreclosure.com parent company, Foreclosure Freesearch Inc., said he doesn’t believe the company has cash-flow issues. Sullivan questions whether Geisen’s compensation was excessive, and whether money was diverted to Geisen-related entities.

Robert Critton, an attorney representing Geisen in that case, dismissed the allegations.

He said Sullivan and Dominic Muttillo, who also claims ownership in Foreclosure Freesearch, earlier passed up an opportunity to settle the legal dispute over their stake in the company that was worth about $600,000 apiece — they continue to pursue their claims in court.

According to FFS’s bankruptcy filings, Geisen’s salary is currently set at $125,000 a year. The Foreclosure.com founder received a salary of $115,000 in 2008, plus a $1.09 million bonus, the company said. Geisen declined a request for comment.

In another lawsuit pending against Live Data Group and Foreclosure.com, First American CoreLogic claims information it provided under license showed up on at least 77 unauthorized Web sites. Geisen has denied the allegations, calling the lawsuit "frivolous" and characterizing it as part of an attempt by First American CoreLogic to create a competing site or "bully" him into buying more data (see story).

In its bankruptcy filings, FFS claims more than 150 Web site domains, including ForeclosureCenter.com, ForeclosureDatabase.com, ForeclosureFreesearch.com, CelebForeclosures.com, FirstCapitalCard.com, HowsYourCredit.com, GovernmentHousing.US, HUDhouses.com, LavaLead.com, REOselect.com, and Sell2Own.com.

Sullivan, Muttillo, and First American CoreLogic are listed as disputed unsecured creditors in FFS’ petition for Chapter 11 bankruptcy protection.

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