A winning bidder has emerged to acquire the business of ShiftPixy, according to bankruptcy court filing. G3 Business Services, the winning bidder, is to acquire the business lines, which comprise a human capital management platform and staffing operation.

Miami-based ShiftPixy filed for bankruptcy protection on Oct. 28. Its shares ceased trading on the Nasdaq that same day. The Miami-based company fired CEO Scott Absher that same month, and CFO Patrice Launay resigned. Its board members also announced they were stepping down after finding the company was “insolvent by every reasonably accepted metric.” ShiftPixy named Jonathan Feldman as chief restructuring officer.

Feldman — along with advisory firm Hilco Streambank and law firm DGIM — determined G3 was the successful bidder following an auction Dec. 10.

The court on Dec. 16 will consider approval of the sale, which is expected to close on or before Dec. 19.

G3 has been contacted for comment.

As of the date it filed for bankruptcy protection, ShiftPixy served 14 clients and had revenue of about $16.8 million, according to an Oct. 30 filing in bankruptcy court with comment from Feldman. The filing also shed further light on ShiftPixy’s situation and noted that CEO Absher was terminated for cause on Oct. 19.

“The basis of this decision rested on events that occurred two days before,” according to the filing. “On the morning of October 17, 2024, [ShiftPixy] issued a press release announcing that it had acquired another company called TurboScale for $150 million, structured with $75 million in stock and $75 million in debt.”

The announcement resulted in a spike in ShiftPixy’s strock price from the prior day’s close of $5.50 to an opening price of $13.11 and an intra-day high of $14.64, the filing said. However, a subsequent regulatory filing by the company made clear the TurboScale acquisition was not final and remained subject to negotiation. The deal was later called off.

The court document also pointed to a ShiftPixy 10-K filing with the US Securities and Exchange Commission, which indicated the company had received notices for $11.8 million for unpaid tax liabilities including penalties and interest.

“Put simply, clients were transferring funds to [ShiftPixy] with the understanding that those funds would be used in part to fund federal, state and local taxing authorities. That was not occurring as disclosed in the 10-K,” Feldman wrote in the court filing.

ShiftPixy also had outstanding payment obligations for about $8.4 million, according to the filing. Of this amount, more than $7 million was more than 120 days past due.

ShiftPixy also appeared to be paying several million dollars in legal fees on an annual basis, according to the filing. There were approximately 20 matters in which litigation was ongoing or in which settlement was achieved but obligations still remain.

The filing also cited another company, Media Network Consultants, which received $3.4 million in transfers from ShiftPixy from April 2020 through May 2024. The manager of Media Network Consultants is a former employee of ShiftPixy. No written agreement with this company could be found.

“Considering the aggregate number of payments, the whole dollar amounts involved, lack of documentation and the use of a proton email address, further investigation of these transfers is warranted,” Feldman wrote in the court filing about the Median Network Consultants transfers.

Feldman said the former employee said “he would get back to me on that” when asked about sending a copy of the contract with ShiftPixy, according to the filing. However, the former employee did not pick up or return any further calls from Feldman.

ShiftPixy et al; US Bankruptcy Court for the Southern District of Florida, 24-21209