A telecommunications company based out of Fort Worth, TX, Teletouch Corp., has announced it will be filing for Chapter 11 bankruptcy, according to sources. The corporation – which operates under the trade name Hawk Electronics – defaulted on a loan to its largest lender, which had blocked access to $800,000 in funds in the corporation’s bank accounts. The company plans to liquidate its assets after the filing either through a liquidation plan with the bankruptcy court or by converting the filing to a Chapter 7 liquidation.
Bankruptcy Due to Default
According to sources, Hawk Electronics had a multi-million dollar line of credit with its largest creditor, New York-based company DCP. The corporation defaulted on this loan last month. Prior to that the telecom company had changed lenders when its previous lender, Thermo Credit LLC, had cut off their funding.
Teletouch has operated for nearly 50 years in the wireless services industry and over thirty years as a telecommunications provider, says a company spokesman. The company says that for its clients, which include Fort Worth-area municipal entities such as government organizations and emergency services, service will continue as normal during the bankruptcy process.
DCP and Teletouch have not been able to reach an agreement on a budget for the short-term repayment of Teletouch’s loans, resulting in the Dallas bankruptcy. After the liquidation of Teletouch and Hawk Electronics’ assets, all existing contracts will be transferred to AT&T, the master service provider for Hawk’s wireless service. Hawk Electronics had two Fort Worth storefronts and one in Arlington, and did business with many local municipal governments, as well as the Fire Department in Fort Worth, and two police departments in the area.