Attached is a memo from The Switch Beverage Co:
November 16, 2005
At a meeting of the Board of Directors of The Switch Beverage Co. on Wednesday, November 15, 2005, a majority of the Directors voted in favor of filing a voluntary petition of bankruptcy under Chapter 11 bankruptcy code. That filing was made the same day with the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division.
While significant efforts by the Board and others were made over the past few months, the financial condition of the Company had reached the point where it was becoming increasingly difficult to attract new capital under any terms and with any degree of certainty that such funding could occur. In addition to those efforts, the Board also attempted a sale of the Company to potential companies engaged in similar product lines. These efforts produced no results that would have resulted in our being able to remain a viable entity pending either funding or purchase.
Under the Chapter 11 filing and subject to the approval of the Bankruptcy Court, an affiliate of the largest unsecured creditor agreed to provide interim financing to enable the Company to continue to operate on a limited basis. The Directors will retain an interim management team to handle the day-to-day affairs of the Company. Over the next couple of months or so, other parties will have the opportunity to purchase the assets of the Company with any amounts over and above the interim investment going to pay the creditors of the Company in order of priority as established by the Court.
The Board regrets that this action had to be taken, but in lieu of a complete liquidation of the Company under Chapter 7, it was the only viable option available to the Board in fulfilling its duty to the creditors and other investors.
The Board expects to issue details regarding the bidding process for the assets of the Company shortly, and will issue further information as it becomes available.
For additional information, please contact the Company at its offices at (804) 745-6495.