Troubled CRM (customer relationship management) vendor Entellium has filed Chapter 11 bankruptcy and Intuit is interested in buying the company's assets, according to documents filed in a Washington state U.S. Bankruptcy Court.
The bankruptcy filing follows the arrest of Entellium's former CEO, Paul Thomas Johnston and ex-Chief Financial Officer Parrish Jones on grounds they lied about the company's sales performance to attract about US$50 million in private investment funds.
The Seattle vendor is known for the video game-influenced design of its Rave product.
An Entellium employee first discovered the alleged fraud, leading to the former executives' arrests in early October.
"As a result, the Entellium Companies lost the support and confidence of their investors," reads one filing in the bankruptcy case. "Given these circumstances, and without investor support, the Entellium Companies quickly determined that they would not be able to operate profitably on a long-term basis. ... The Debtors determined that the best means to maximize the value of the Business is through a sale of their CRM-related intellectual property assets."
The company contacted 28 potential buyers. This led to "discussions with seven interested parties, including four offers to buy the Debtors' customer base."
Entellium eventually began negotiating with Intuit, coming to terms on a purchase agreement that will see Intuit pay about $7.7 million, according to court documents.
An Intuit spokesman did not immediately return a call for comment Wednesday. It was not clear how Entellium's products would fit into Intuit's ERP (enterprise resource planning), CRM and accounting portfolio.