A Pennsylvania company has completed its $3.5 million acquisition of Interlogic Outsourcing Inc., an embattled payroll company based in Elkhart.
This story by Jordan Fouts originally appeared in The Elkhart Truth.
PrimePay of West Chester, Pa., announced Wednesday that it had acquired IOI’s assets, following the approval of the deal by a district bankruptcy court judge. IOI filed for Chapter 11 bankruptcy protection in August, shortly after KeyBank sued the company for millions of dollars in wire transfers it says owner Najeeb Khan made in July.
The bank said there wasn’t enough money in company accounts to pay for the transactions.
Interlogic is also being sued by more than 50 clients, who say in a joint action that the company withdrew their money to cover payroll taxes but never made those payments. Both actions were paused by court order as the bankruptcy issue proceeded.
In its bankruptcy filing, attorneys for Interlogic Outsourcing said it owes between $10 million and $50 million to between 5,000 and 10,000 creditors across the country but has assets worth only $1 million to $10 million. PrimePay was the only qualified bidder when IOI went up for auction in September, according to court filings.
PrimePay will be acquiring IOI’s intellectual property and a portion of its physical property as well as its existing client base and employees, according to the Pennsylvania company’s announcement.