Agents Steamed Over Trinsic Bankruptcy FalloutAgents Steamed Over Trinsic Bankruptcy Fallout
October 1, 2007
The post-Trinsic-bankruptcy plot thickens. And if it werent for the fact that were talking about telecom, the story would sound an awful lot like a soap opera.
It all started in February, when Trinsic Inc., the former Z-Tel Technologies Inc., filed Chapter 11 bankruptcy. After much back-and-forth, private equity firm Platinum Equity LLC landed Trinsics assets trademark and customers in a court-sanctioned auction. The liabilities including unpaid agent commissions went to an Alabama law firm, which is serving as the trustee of the Trinsic estate. But Trinsic was planning to pay those commissions, according to a Feb. 21 letter from the companys now-former CFO to at least one master agent.
However, once the auction papers were signed and Platinum took control of Trinsics assets, all of that went out the door. Platinum put Trinsics subscribers into the hands of another telecom company it owns, Dallas-based Matrix Business Technologies. At that point, Trinsic technically was no more. Not long after, estate trustees changed the terms of Trinsics bankruptcy to Chapter 7. That means complete liquidation and almost no chance of recovering money owed.
Still, it looked as though Matrix and Platinum might give agents some hope. One master agency, Gryphone Telecom Consultants LLC, got several emails from Matrix about a new contract and sat in on conference calls about becoming business affiliates. The new contract never materialized. Frank Moynihan, Gryphones president and CEO, now realizes that they gave us a lot of misleading information.
Then came the master agent agreement cancellations. Gryphone got a phone call. They were kind enough to tell us that they were not going to pay us anymore, says Moynihan, who hasnt received notification in writing.
It was actually the Trinsic estate, not Matrix, that ended the contracts, says Kevin Gorman, vice president of marketing for Matrix. (You might remember Gorman from Global Crossing.) They wouldnt have heard from Platinum or Matrix because thats something we wouldnt even touch, says Gorman.
Moynihan, however, says his call was from a Matrix executive.
Nonetheless, Gorman says he feels for the agents whove been shafted. I know all those guys, he says. I can empathize with this situation, and [agents] should have rightful indignation with how things turned out.
But consoling words wont work on PlanetOnes Ted Schuman. Like Gryphones, PlanetOnes contract was axed. That wasnt such a shock. The nasty surprise came when Schuman learned Matrix had gone to one of his subagents and signed an agreement directly with that person. The subagent still has approximately 10,000 lines on the Trinsic network, but from here on out, PlanetOne wont get its cut of the monthly commissions.
Schuman is outraged. Ive never seen a company so openly and flagrantly circumvent the channel for their own personal gain, says Schuman, who is president and CEO of PlanetOne. Just when you think youve seen it all theres always somebody else that seems to find new lows.
Schuman doesnt blame the subagent. That person was afraid not to sign with Matrix because that would have meant nearly going out of business. The agent was freaked out, says Schuman.
Gorman understands where Schumans coming from. But the master agent contracts were signed with Trinsic and Z-Tel, and, right now, master agents are not part of our strategy. Besides, since Platinums goal is to make the most possible money on its investments, keeping the business from PlanetOnes subagent only made sense. Platinum spent millions of dollars assuming these assets, so we have every legal right to manage those assets in any way we see fit, Gorman says.
That bald reality likely wont endear agents to Platinum companies, so, perhaps its good that Matrix and Platinum say running a channel program doesnt fit into their business model. But if thats the case, why was Matrix trying to get agents like Gryphone to join its business affiliate program?
Regardless, any Platinum-held telecom company is likely to have a tough time wooing agents. We would tell them just to walk away, Moynihan says. Go find somebody foolish enough to do business with you.
I dont have any good feelings about these guys at this point, says another agent, who requested anonymity.
Schuman advises any agent with business on networks owned by Platinum to move those accounts. They will never pay the agents. You might as well write it off, he says.
Calls to Platinum principal Mark Barnhill, who spoke with PHONE+ earlier this year about Trinsic, were not returned, nor were inquiries to the lawyer handling Trinsics estate matters.
Communications Companies Owned by Platinum Equity
Altura Communication Solutions Purchased in 2001 from Fujitsu Ltd.. Designs voice and data applications.
Americatel Corp. Acquired July 2006 from ENTEL. Provides telecom services to North American Hispanic market.
DCA Services Bought in May 1997 from WorldCom. Does outsourced billing and back-office work for communications companies.
Matrix Telecom (Matrix Business Technologies) Acquired in December 1999 from NetLojix Communications. Sells telecom services to SMBs throughout the country.
Startec Global Communications Acquisition announced in July 2007. Startec targets ethnic markets with long-distance services.
USRobotics Bought in September 2005 from corporation of same name. Makes and distributes broadband and analog modems, and products for wired and wireless networks.
Vanguard Managed Solutions Purchased in August 2001 from Motorola Inc. Offers managed network services and IP access routers.
WFIs Deployment Business Acquired in July 2007 from Wireless Facilities Inc. Manages and implements projects for wireless communications industry.
Source: Platinum Equity
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