ShiftPixy acquired: G3 Business Services buys bankrupt staffing firm
FLORIDA, UNITED STATES — ShiftPixy, a Miami-based human capital management and staffing firm, has been acquired by G3 Business Services following its bankruptcy proceedings.
The ShiftPixy acquisition deal
The bankruptcy court is set to consider the approval of the sale on December 16, with the transaction expected to close by December 19. This acquisition includes ShiftPixy’s human capital management platform and staffing operations, which served 14 clients and generated approximately $16.8 million in revenue at the time of the bankruptcy filing.
ShiftPixy’s troubled history
ShiftPixy’s journey to this point has been marked by controversy and financial difficulties. The company, which operated in the United States, faced several challenges.
CEO Scott Absher was terminated for cause on October 19, following a questionable announcement of a $150 million acquisition that was later called off. CFO Patrice Launay resigned, and board members stepped down, citing the company’s insolvency.
Court documents also revealed unpaid tax liabilities of $11.8 million and outstanding payment obligations of about $8.4 million. Jonathan Feldman, appointed as chief restructuring officer, noted in a court filing, “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.”
The company faced approximately 20 ongoing litigation matters and was paying several million dollars in annual legal fees. Additionally, questionable transfers of $3.4 million to Media Network Consultants, managed by a former ShiftPixy employee, raised concerns about the company’s financial practices.
Industry implications
The acquisition by G3 Business Services marks a new chapter for ShiftPixy’s operations. As the industry watches this transition, the focus will be on how G3 plans to leverage ShiftPixy’s technology and client base while addressing the financial and operational challenges that led to its bankruptcy.
