WYNIT, the electronics distributor that announced the closure of its downtown Greenville headquarters last month, says it’s bankrupt.
Wynit Distribution LLC and related corporate entities filed for Chapter 11 protection on Sept. 8, according to documents on file in U.S. Bankruptcy Court in Minnesota.
The distributor of consumer electronics announced in late 2015 that it would move a headquarters operation from North Syracuse, N.Y., to the One complex in downtown Greenville.
In a surprise announcement late last month, WYNIT said it would shut down its Greenville operations, affecting 140 employees.
At the time, WYNIT disclosed little about the reasons behind its decision, citing only “a number of unexpected financial issues combined with a disappointing holiday selling season.”
Peter A. Richichi, the company’s chief operating officer, provided more details about the financial crunch in a declaration made to the bankruptcy court.
Among the factors he cited was a sales shortfall on the part of WYNIT’s largest supplier, a consumer electronics manufacturer.
He didn’t name the supplier, but the bankruptcy filing identifies the largest unsecured claim against WYNIT as $31.5 million from Fitbit Inc., the San Francisco-based maker of smartwatches and wearable fitness trackers.
In his statement to the court, Richichi details unsuccessful negotiations to obtain additional product from the supplier and a failed attempt to secure more financing.
He also cited having to get a new chief financial officer up to speed and the relocation of the company’s headquarters to Greenville as factors in the crisis.
Richichi said WYNIT determined on Aug. 24 that it could no longer operate and decided to terminate more than 200 employees.
Going forward, Richichi told the court, WYNIT intends to maintain operations in Eden Prairie, Minn., and sell its software division.
It will also liquidate about $90 million of inventory stored in warehouses, he said, and try to collect about $108 million in outstanding accounts receivable.
Richichi also said WYNIT’s 10-year lease of 57,330 square feet of office space in the ONE complex runs through January of 2026.
He said the company believes the monthly rent of $127,565 is “substantially below market.”
Richichi told UBJ via email that WYNIT is working with Hughes Development Corp., the Greenville-based owner of the One complex, on several options for the office space. He declined additional comment for the time being.