HookMedia Files for Chapter 11

HookMedia, an interactive media buying and planning shop, has filed for protection under Chapter 11 of the federal bankruptcy statues as it prepares to sell off most of its assets to Havas Advertising’s New York-based Media Contacts unit.

Don Epperson, president and founder of Hook, a Boston-based independent, late Monday confirmed the filing in Federal Bankruptcy Court in Boston and attributed the move mainly to the continued stagnant economy, particularly in the Internet and technology sector.

According to the filing, HookMedia has total assets of $13.6 million and total debts of $10.6 million. Topping the list of creditors with the largest unsecured claims are USinternetworking ($420,404), Doubleclick ($317,134) and ZDNet ($248, 636).

Sources said the shop continues to work for Blue Cross & Blue Shield of Massachusetts, EMC Corp., PricewaterhouseCoopers and several others.

The company, was formed in 1998 inside Pro Media of Natick, Mass., and spun out on its own about two years later, eventually growing to employ more than 100 staffers and open outposts in New York and Atlanta. Growth slowed in February, however, when the shop shuttered its 10-person Atlanta operations and began laying off staff at its Boston headquarters.

Currently, Hook employs about 50 people in Boston and New York “almost all” of whom, including Epperson, will likely move to the Havas group when the deal is completed in late-May, Epperson said. Steve Farella, CEO of Havas’ Media Planning, which oversees Media Contacts, said late Monday that he had no information about the proposed purchase of HookMedia assets.

Epperson said, “We began negotiating with them [Havas] a while ago and then one of our clients couldn’t pay on a receivable and that forced us into a Chapter 11 filing. I regret it. I’m trying to work through this with our employees and our clients.”

Hook had raised more than $16 million in two rounds of venture financing. Epperson is an owner, along with venture companies Advanta Partners, Audax, Brookside Fund and Still River Fund, Epperson said, though he declined to break down the distribution of ownership.