Agent Alliance Asks Court to Force Decision on TNCI Contract

By Khali Henderson

The Agent Alliance, a consortium of telecom agents, on Friday filed a motion with the federal bankruptcy court in Massachusetts to compel Blue Casa Telephone, the likely winner of bankruptcy sale auction for Trans National Communications International Inc. (TNCI), to assume or reject its contract.

Blue Casa Telephone was named in January the stalking horse bidder in the TNCI bankruptcy, which was first filed in October 2011. No competitive bids were received by the March 5 deadline, so it is likely the bankruptcy court will approve the sale to Blue Casa in a March 13 sale hearing.

As part of the asset purchase agreement filed with the court, TNCI included two lists identifying the contracts and leases that Blue Casa is potentially interested in acquiring as part of the sale.

“The fact that none of the agents’ contracts with TNCI are included on these lists makes clear that Blue Casa is not interested in acquiring the agents’ existing contracts with TNCI,” said the Agent Alliance in a press statement issued Monday.

“After seeking advice from our counsel the Alliance has concluded that the only way to protect our members is to file a motion with the Bankruptcy Court asking that Blue Casa and TNCI make a decision to assume or reject contracts with Alliance members no later than the initial closing on the sale,” the Alliance said in a press statement.

Despite filing the motion, the Agent Alliance also said that it may yet be able to reach an agreement with Blue Casa. However, it said in its statement, “those discussions have not been meaningful so far.”

“The Alliance remains interested in reaching an agreement with Blue Casa to move forward with a meaningful relationship that includes protection for the residual stream from the customers that weve worked so hard to generate and maintain for TNCI, payment of cure amounts that were legitimately owed, an ongoing commitment to the channel, a competitive portfolio of SMB telecom solutions that we can sell, reasonable compensation for future sales, and effective support to our customers and us,” the alliance said in its statement.

In an interview with Channel Partners, Blue Casa CEO Jeff Compton said the company was interested in securing a deal with agents and requested their patience with the process.

“I think that there’s an artificial deadline or feeling among some agents that this has to be done immediately,” Compton said in late February, noting that the parties have until the sale’s closing to work out a deal.

In what may be a prescient comment, he told Channel Partners in February that should agents file a motion to compel before Blue Casa’s review of agent agreements is completed, they may end up with rejected contracts and a “doughnut hole” in their commissions until a new agreement can be reached.

Compton also said in February the company is talking with agents one-on-one and in groups (i.e. the Agent Alliance) and expected to have a plan that will enable agents to keep their residual commissions. However, he said all agent agreements may not be affirmed as-is, but may need to be amended.