University Directories, a collegiate marketing publisher in Chapel Hill, has filed for Chapter 11 federal bankruptcy protection in an acrimonious court battle between two Triangle businessmen.
University Directories’ owner James Heavner said his company is seeking court protection to avoid a hostile takeover by Greg Lindberg, president of Durham-based Eli Global, which was in the process of buying University Directories. The first bankruptcy hearing will be Tuesday.
Meanwhile, another of Lindberg’s businesses, UDX, is suing University Directories and other Heavner businesses in Durham County Superior Court. Lindberg alleges that Heavner’s businesses owe UDX more than $5 million and are dissipating cash, doctoring financial documents and recklessly mismanaging their finances.
Heavner and his companies “have so grossly mismanaged their financial operations that the collateral is devalued and will continue to lose its value at an exponential pace,” the UDX suit says. “University Directories’ financial officers have displayed a lack of understanding of the rudimentary accounting principles necessary to prevent the company from falling into financial ruin.”
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According to Heavner’s bankruptcy filings, UDX bought University Directories’ bank loans from the Bank of North Carolina and then notified Heavner that the loans were in default and that UDX would take ownership of Heavner’s company.
The bankruptcy filings allege that Lindberg-owned Eli Global signed confidentiality agreements to review University Directories financial books, and then used the information to launch a hostile takeover.
“Filing this bankruptcy stops this ridiculous lawsuit that they filed,” said Heavner’s lawyer, John Northern. “He’s just engaged in bad behavior.”
The bankruptcy filings spell out a plan for Heavner to sell his home in Hilton Head, S.C., to pay off the loans that Lindberg has acquired. The sale of the Hilton Head home would fetch $5.2 million from a couple who have agreed to buy the property. About $4 million would be paid to Wells Fargo to pay off loans.
Heavner also plans to sell his Chapel Hill home, Northern said. And he still plans to pursue a sale of the University Directories business.
Heavner, 75, is a longtime Chapel Hill business man and broadcaster. He has been a commentator on Chapel Hill’s WCHL radio station, which broadcasts Tar Heel football and basketball games.
University Directories, which does business as The Around Campus Group, has been in operation for 40 years. It produces daily planners, campus handbooks and directories, media guides and class schedules for more than 300 colleges and universities.
Among Heavner’s other businesses included in the bankruptcy filing are Vilcom Properties; Print Shop Management, which owns a Chapel Hill retail store; Vilcom Real Estate Development; and Vilcom Interactive Media, which owns WCHL radio station in Chapel Hill.