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ServiCom Canada Ltd. owes thousands of dollars to five unsecured creditors based in Cape Breton. The call centre’s parent company, JNET Communications, filed for bankruptcy protection on Oct. 19, resulting in late pay for staff and a cleaning company pulling its services due to non-payment.
The ServiCom call centre in Sydney is shown in this file photo. - Chris Shannon

U.S. bankruptcy court accepts offer to buy ServiCom Canada Ltd.; looking to reopen as early as Jan. 2

SYDNEY, N.S. — A U.S. bankruptcy court has accepted a $1.5 million offer to sell the ServiCom Canada call centre in Sydney to Iowa-based Marlowe Companies Inc. (MCI) following a bidding war involving three American investors.

The decision came down in a New Haven, Conn. courtroom late Tuesday afternoon after a hearing lasting nearly three hours.

The initial price was set at $400,000 in a negotiation with the newly established MCI Canada last week but ServiCom said it would be open to higher bids.

The deal must be finalized by Friday, according to Business Minister Geoff MacLellan.

Geoff MacLellan
Geoff MacLellan

“They will have to take some time (Wednesday) morning to officially conclude the process,” MacLellan said moments after the decision came down.

He said the move was “encouraging” with a new owner ready to step in after the sudden closure of the call centre two weeks ago.

“During the court process (Tuesday) our solicitors brought forward a requirement that was put in writing for all three bidders that this call centre would remain intact in Sydney.

“We were guarding against breaking up the call centre and moving it elsewhere. The fact all three bidders committed to that in writing was a testament to the value of the workforce that we have in Cape Breton.”

The ServiCom call centre, located at the Sydney Shopping Centre, will now be called The Sydney Call Centre Inc. It has already set up a domain name at www.thesydneycentre.com.

ServiCom’s parent company, New Jersey-based JNET Communications LLC, filed for Chapter 11 bankruptcy protection on Oct. 19. It ceased all operations at its call centres in Sydney and Machesney Park, Ill., on Dec. 6.

The new company will not take any responsibility for ServiCom’s liabilities including back wages owed to the more than 500 employees. Some staff members have three to four weeks of pay owing to them.

MCI Canada plans to enter into a nine-year lease in order to run the shuttered facility.

Anthony Marlowe
Anthony Marlowe

“We are aware of the debt structure and asset-light nature of JNET, ServiCom, and ServiCom Canada businesses and are disappointed that no reasonable level of consideration to the bankruptcy estate will ever make its way to the displaced ServiCom workers,” MCI CEO Anthony Marlowe said in a release issued Tuesday.

“We will do as much as possible to assist the workers impacted and have decided to provide an employment offer to ServiCom workers that will include sign-on and retention bonuses. We hope that this will help lessen some of the financial impacts of the closing.”

ServiCom’s only assets have been described in court as its contracts with its four clients ­– GM OnStar, Sirius XM satellite radio, AT&T and Allstate.

Former ServiCom Canada site director Todd Riley will be meeting with Marlowe when the Iowa businessman touches down in Sydney late Wednesday. A meeting with all employees to give them an opportunity to speak with their new boss is being scheduled for Thursday.

Riley said he will be reaching out to ServiCom’s former clients, particularly Sirius XM, which transferred some work to the Concentrix-operated Convergys call centre in Glace Bay following ServiCom’s closure.

Todd Riley
Todd Riley

“It was just a really smart move by (Sirius XM) to ensure there was gainful employment for some of our agents and supervisors that may have needed some work during this time,” he said.

“We are working with (Sirius XM) and Concentrix to ensure a smooth transition (back to the Sydney call centre).”

It’s Riley’s understanding that all employees laid off on Dec. 6 will be rehired by Marlowe’s company.

An opportunity to keep ServiCom open during the sales process fell through on Dec. 5 between MCI Canada and Coral Capital Solutions, which regularly purchased ServiCom’s accounts receivables to allow the necessary cash flow to meet the call centre’s payroll obligations.

Coral Capital was unwilling to release money to ServiCom through its reserve fund because it still had receivables to collect from ServiCom’s contracts.

It resulted in the immediate closure of the two call centres the next day.

Marlowe, 39, based in Iowa City, is the founder of MCI, which is a holding company for the call centre and digital technology businesses he operates – Mass Markets, Gravis Apps and OnBrand24.

He said the MCI leadership team has been “inspired” by how the general public and government agencies in Cape Breton have rallied around the laid off workers.

"We are launching MCI Canada, The Sydney Call Centre, because of the amazing community, high aptitude workers, outstanding regional officials and committed clientele,” he said.

MCI Canada, a wholly owned subsidiary of Mass Markets, will operate The Sydney Call Centre, Inc. as a subsidiary of MCI’s North American tech-enabled contact centre business.

The new logo for the Sydney Call Centre Inc., an MCI Company.
The new logo for the Sydney Call Centre Inc., an MCI Company.

Marlowe said he hopes to reopen the call centre by Jan. 2 or “as soon as possible after that,” at which point it’ll begin operation with “inbound and outbound customer service, technical support, and inside telesales programs,” according to the release.

Mass Markets currently operates four call centre facilities out of Iowa and South Dakota. MCI is headquartered in Iowa City and has operations in Iowa, Georgia, Florida, Massachusetts, New Hampshire and South Dakota.

Marlowe began his career as a telemarketer and became a call centre manager responsible for a sales workforce of more than 200 people by the time he turned 22.

He founded business process outsourcing company, TMone, in 2003, and served as its CEO until 2007. TMone changed its name to Mass Markets in 2015.

Marlowe was recognized as one of the 25 youngest CEOs in the U.S. by Inc. Magazine in 2007.

Marlowe went on to acquire software company Gravis Apps in 2016 to bolster its technological capabilities. He quickly followed by purchasing Boston-based call centre OnBrand24, a company that has provided online customer service for about 200 mid-sized companies.

With the Sydney call centre now part of its operations, MCI will employ about 2,000 people.

MCI has seen 270 per cent growth over the past two years, according to the company.


The Sydney Call Centre Inc.

  • Operated by MCI Canada, a wholly owned subsidiary of call centre company Mass Markets based in Iowa.
  • Taking over business from ServiCom Canada Ltd., which filed for Chapter 11 bankruptcy protection in the U.S. on Oct. 19 and ceased all operations on Dec. 6.
  • MCI CEO Anthony Marlowe planning to reopen call centre as early as Jan. 2.
  • New operator will not take on any liabilities, including back wages owed to employees, from ServiCom but will offer sign-on and retention bonuses

Related:

• การพนันบอล ServiCom in Sydney employees seeking back pay

Purchase price in place for ServiCom call centre

Lawyers hash out ServiCom Canada bankruptcy in U.S. court

Iowa City businessman Anthony Marlowe could finalize purchase of Sydney’s ServiCom call centre next week

ServiCom call centre in Sydney throws 600 out of work

ServiCom bankruptcy documents list five unsecured creditors based in Cape Breton

Employee panic at ServiCom call centre in Sydney

• Bankruptcy protection for Sydney call centre


chris.shannon@cbpost.com

Twitter: @cbpost_chris

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