October 12, 2001, 12:00 AM

Netcentives files for Chapter 11 reorganization

Netcentives, an e-mail marketing and loyalty company, has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

San Francisco-based Netcentives Inc., an e-mail marketing and loyalty company, has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code together with its subsidiaries, Post Communications Inc., and MaxMiles.

Netcentives says it intends to maintain operation of all existing loyalty programs and services, including its ClickRewards, Delta SkyMiles Shopping, and United MileagePlus Shopping rewards networks, the E-mail Marketing Group and other related services while it seeks to sell business assets in an auction expected to occur in November.

"The filing is an important step in protecting the value of our loyalty and e-mail business operations and the underlying intellectual property, patents and source code as we seek to sell the company`s business operations," Eric Larsen, chief executive officer of Netcentives said in a prepared statement. "The asset auction is a continuation of a restructuring plan announced earlier this year in which we are now divesting assets and reviewing payables under the guidance of the court to prioritize liabilities and preserve cash flow for creditors and, potentially, shareholders."

The company also announced it has signed a letter of intent to sell its E-mail Marketing Group, formerly Post Communications, to Plum Acquisition Corp., a company headed by Post founder Hans Peter Brondmo. The proposed transaction is subject to competitive bids and bankruptcy court approval.

In a related announcement, Netcentives disclosed that it had signed a multi-million dollar patent licensing agreement with a leading Internet media company. This agreement enables the licensee to operate the online portion of its rewards programs under Netcentives’ patents.

Netcentives says it has sufficient cash on hand to finance operations through auction of its assets.

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