ELKHART — A Pennsylvania company has completed its $3.5 million acquisition of Interlogic Outsourcing Inc., an embattled payroll company based in Elkhart.
PrimePay LLC, of West Chester, Pennsylvania, 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 over 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 say 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.
“We are excited to bring renewed energy, stability and opportunity to IOI’s loyal clients and dedicated employees,” PrimePay CEO Bill Pellicano said in the release. “By joining a nationwide family, employees have an opportunity to grow and continue building their careers. For clients, we will be bolstering the high-quality service they’ve come to expect while offering to them valuable resources and an additional suite of services. And for the Elkhart business community, we are looking forward to joining you.”
The employee management company was founded in 1986 and now has more than 600 employees and over 40,000 clients. PrimePay says it will try to ensure a smooth transition for new clients.
“We work diligently to be a reputable, dependable partner whom business owners can trust,” Pellicano said. “We understand that there have been challenges with IOIPay’s ownership, and it is our promise to guide their clients through this transition as easily as possible, and to develop a longstanding relationship.”