Digital Commerce Files for Bankruptcy, Seeks Buyers
- By Gail Repsher Emery
- Aug 20, 2001
Digital Commerce Corp. of Herndon, Va., filed for Chapter 11 bankruptcy June 29, and the company is attempting to reorganize and sell certain assets, its acting president and chief executive officer, George Shaunessy told Washington Technology.
The 6-year-old company's filing with the Eastern Virginia federal district court in Alexandria, Va., listed assets of $50,000 or less, liabilities of $50,000 or less and no more than 15 creditors.
Shaunessy of Affiliated Management Services in Atlanta said the Digital Commerce board of directors hired him in March to oversee company operations.
The company's electronic marketplaces for government clients, including fedcenter.com and statecenter.com, are still operating, Shaunessy said. However, Washington Technology's calls to the company switchboard Aug. 20 were not answered.
Digital Commerce won a contract in January to develop an online buying market, COGBuy.com, for the Metropolitan Washington Council of Governments. It had also secured $10 million in funding in December, according to Tom Meagher, vice president of equity research at BB&T Capital Markets of Richmond, Va.
The pilot site of COGBuy.com was on schedule until Digital Commerce filed for bankruptcy, said Michael Rogers, executive director of the Metropolitan Washington Council of Governments. Digital Commerce then suspended operation of the platform on which the site sits and stopped efforts to complete the site, Rogers said.
The council is evaluating its next action and hopes to have an operating portal within the next few months, Rogers said.
"We are still committed to such a portal. We feel it can really add value to our members," he said.
Digital Commerce's bankruptcy wasn't a surprise, Meagher said. Digital Commerce was a "typical dot-com startup" that had been in serious trouble since last year, he said.
The company's downfall was poor management and the "general malaise affecting the whole [business-to-government] sector," said Meagher, who told Washington Technology in February that he expects more than half of the 70-plus e-gov companies he follows to shut down within a year.
Digital Commerce had closed a $20 million round in venture capital funding in December 2000 and expected to be profitable by the end of this year, Tony Bansal, then chief executive officer, told Washington Technology in February. The company had backed away from its proposed $115 million initial public offering of stock in September 2000 because of poor conditions in the stock market, Bansal said in February.