Plastiq Files For Bankruptcy
Update: Priority Technology Holdings, a platform for unified commerce that delivers integrated payments and banking at scale, announced that it has entered into a definitive agreement as the stalking horse bidder to acquire substantially all of the assets of Plastiq, Inc and certain of its affiliates in its Chapter 11 Restructuring. The Purchase Agreement is subject to Bankruptcy Court approval.
“Our decision to enter into this agreement was simple. Strategically speaking, Plastiq’s buyer-driven B2B product suite is a natural complement to our CPX Automated Payables offering, and the company has an extremely talented team with a mindset that will fit naturally into the collaborative and execution-oriented culture at Priority,” said Thomas Priore, Chairman and CEO of Priority. “Since we are already partners for payment processing, we are well positioned to help support the restructuring and Plastiq’s customers as the company emerges stronger from the process.”
Plastiq is a service that lets you pay bills with a credit card, when you are not able to do so directly with a merchant. While fees have increased to 2.9% in recent years, and some credit card issuers have added restrictions, it is still a useful way to hit credit card spending from the comfort of your home. You can pay your mortgage for example, auto loan, or other services.
If you use Plastiq to pay your bills, then there’s some bad news. View from the Wing reports that the company has filed for filed for chapter 11 bankruptcy protection. Plastiq already had some issues when Silicon Valley Bank failed, and there could be more trouble ahead.
The San Francisco-based company listed both assets and liabilities in the range of more than $50 million to as much as $100 million in a Chapter 11 petition filed in the District of Delaware. At one point, Plastiq received a $550 million market valuation. But, it failed to go public via an attempted SPAC merger in August of last year.
VFTW reports that this is not a liquidation, and if all goes according to filings in day one proceedings, service might not be interrupted. Plastiq has secured $7.1 million of debtor-in-possession funding to finance itself through bankruptcy, court papers show. The company plans to sell itself in bankruptcy. But while this plays out, it is obviously best to just stop making any payments through Plastiq for now.