TMCnet News

Zultys Auction Picks Up on Monday amid Political Posturing
[October 27, 2006]

Zultys Auction Picks Up on Monday amid Political Posturing

TMCnet Executive Editor

As the Zultys Technologies (News - Alert) auction proceedings enter their second week on Monday, the parties attending the hearings in U.S. Bankruptcy Court, Northern District of California, in San Jose have begun to resort to political posturing.

On Wednesday, Pivot VoIP, the Mountain, Calif.-based company backed by Telrad Connegy of , signaled its intentions to start the biding at $1.6 million, following the initial bid of $1.55 million pledged by InPath Devices, a former Zultys reseller based in Omaha, Neb. But Judge Arthur S. Weissbrodt never officially started the bidding after more complications arose with the auction process and adjourned until Monday.

Instead, Pivot VoIP has been accused of trying to break up the company in order to take all of the key intellectual properties back to its Israeli headquarters. Word is also that InPath (acting as Newzul) doesn’t plan to return to the proceedings next week.

Matt Ferro and Michael Yee of InPath have returned to their Midwest base; however, they weren’t available for comment.

The accusations led Avi Weinrib, acting President and CEO of Pivot VoIP, to respond publicly on Rich Tehrani’s VoIP Blog, announcing their intentions to “continue the product development and support of the Zultys line and to enable us to maintain the strong relationship with its reseller base, should we be successful at the auction.”

In his posting, Weinrib stated:

• We will continue the product development cycle in the Silicon Valley, in our new offices in Mountain View.
• We believe strongly in the product and we already have on board the very right team to continue to support it.
• We look at the distribution channels as a most valuable asset to us.

The statement is consistent with job postings found on leading Internet employment sites, indicating the company’s plans to remain in the Silicon Valley . Pivot’s intentions were also confirmed by Vladimir Movshovich, the former vice president of technology at Zultys who was recruited to Pivot along with a core set of former engineers.

“Pivot is planning to continue to product. Pivot is also planning to continue to utilize the reseller channel to make the company profitable as soon as possible,” Movshovich told TMCnet during a telephone interview.

Meanwhile, Zultys Founder Iain Milnes has confirmed that he has left the country; however, the company is still involved in the auction process. Although he has been outbid, he is currently trying to raise additional funding by rallying the reseller community to participate in the bid.

“If we get 100 or 200 resellers to support us at $10,000 or $20,000 each, we're home and dry. So that's what we're looking for,” Milnes told TMCnet.


Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.

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