altimore-based ERN, LLC and its operating divisions, which include Nationwide Check Services, Nationwide POS Leasing and Nationwide Credit Card Center, filed a voluntary petition in U.S. Bankruptcy Court for the District of Maryland for relief under Chapter 11 of the Bankruptcy Code on April 28, 2004.

ERN specializes in providing electronic check-including conversion, guarantee and check imaging-credit, debit card and EBT processing and POS equipment to merchants through the ISO and merchant level salesperson sales channels.

ERN operates in six U.S. cities and employs about 50 people in its Baltimore headquarters.

According to court documents, ERN's bankruptcy filing was brought on by a series of disputes- followed by extensive litigation-between ERN's President and co-founder, Rony Natanzon, and his former partner, Sam Buchbinder.

"Right now the story is a dispute between two partners which fought," Natanzon said. "The company is being protected, and there is a negotiation that takes place to get this partner off my back so I can continue the company and take it out from the protection of the court. That's the only way to do it."

Natanzon and Buchbinder were partners in ERN and their relationship allegedly turned bitter when Buchbinder initiated efforts to open a business in Chicago that was in competition to ERN, according to a 2002 article in the Daily Record, a Maryland-based business and legal news publication. Buchbinder said he now serves as a consultant to ABANCO International, LLC, a company he said was "started and owned by his wife" in 2002. ABANCO employs many former employees of ERN.

Supposed actions by both Buchbinder and Natanzon spurred several lawsuits between the two former partners, including one sought by Buchbinder to recover more than $2 million he loaned to ERN and one for $500 million sought by Natanzon, which included compensatory and punitive damages.

"These were really serious disputes," said Jim A. Vidmar, Partner for Linowes and Blocher, LLP and ERN's Attorney. "Buchbinder had five suits pending against Rony and ERN, and it got to be too much."

Court documents pertaining to the case state: "The lack of funding and the litigation have created an untenable climate for [ERN]...The filing was necessary to permit [ERN] to continue to operate as a going concern and to preserve the value of its assets."

The court appointed a trustee, Lawrence D. Coppel, to supervise and manage the affairs of ERN and report to the court.

Chapter 11-bankruptcy protection offers ERN the opportunity to reorganize and refinance in order to prevent final insolvency. In a recent filing with the court, ERN sought and was granted authorization to pay its ISO partners what is owed them for services rendered before April 27, 2004-an amount of approximately $34,000.