Chapel Hill-based University Directories LLC on Friday filed for Chapter 11 bankruptcy protection to shield the company from a hostile takeover.

“My first responsibility is to protect the stakeholders of University Directories, especially it’s employees,” says owner Jim Heavner. “We have customers nationwide who would be affected by this.”

The takeover bid comes from Greg Lindberg, president of Eli Global LLC. Lindberg had originally signed a letter of intent to purchase University Directories.

But during the recent acquisition of Harrington Bank by Bank of North Carolina, University Directories’ corporate debt changed hands.

The loans were bought by UDX LLC, a spin-off of Eli Global. UDX immediately sent notice of technical default and attempted to seize ownership of the company.

Heavner says he was surprised when the potential partnership with Eli Global turned from a sale to a takeover.

“What we thought were going to be honorable purchasers of a good company turned out to be predatory in ways none of us could have imagined,” says Heavner.

With Friday bankruptcy filing, the 40-year-old collegiate marketing company will be placed in the protective custody of the courts while the company seeks another buyer.

In addition to University Directories, the filing includes Vilcom Real Estate, The Print Shop and Vilcom Interactive Media, which owns WCHL and Chapelboro.com.

You can read the full press release below:

CHAPEL HILL, N.C. October 24, 2014–University Directories, LLC filed for protection today under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Middle District of North Carolina to ward off a hostile takeover of the company.

Prior to filing the petition, University Directories had retained an investment banker and after negotiating with a number of potential purchasers, had chosen Eli Global, LLC and signed a letter of intent with Greg Lindberg, Eli Global president. University Directories’ lender, Harrington Bank, was aware of the impending sale and expected the loans to be paid in full at closing–a normal course of events.

During the due diligence phase of the sales transaction, Harrington Bank was acquired by Bank of North Carolina. BNC immediately sold its University Directories loans and other loans to entities related to University Directories to UDX, LLC, a new entity created by Lindberg. UDX LLC, having acquired the loans, suddenly and without warning gave notice of default and disposition of collateral, demanding ownership of University Directories for its own operations. In addition, Lindberg and UDX, LLC gave notice that it intended to declare other loans in default, jeopardizing assets owned by companies related to University Directories.

While the business court might provide relief from such a hostile takeover, it does not do so quickly. In order to protect the business and its employees, University Directories made the decision to file a Chapter 11 petition, along with its related entities obligated on the various notes. Thus, the company will be in protective custody of the courts so that it can continue business operations and pursue a sale of the 40-year-old business to a qualified buyer, thereby protecting its employees, customers, and creditors.

University Directories is owned by James A. Heavner and several of the company’s managers. Heavner said of the filing, “This Company has never missed a bank payment and is current on every loan. We chose to take this action with reluctance because it may cause anxiety among our stakeholders. Yet, in 50 years of owning, operating and selling over three dozen companies, mostly in the media business, we have never encountered anything like this. We will certainly litigate this matter and, in the meantime, the courts are here to protect it. It is an extraordinary situation when potential business partners turn out to be predators.”

University Directories, LLC; Print Shop Management, LLC; Vilcom LLC; Vilcom Interactive Media, LLC; Vilcom Properties, LLC; and Vilcom Real Estate Development are all companies in this filing and are located at 88 Vilcom Center Drive, Suite 160, Chapel Hill, NC. James A. Heavner is a principal of each company. University Directories, founded in 1974, is a collegiate marketing and media company. Vilcom Interactive Media owns and operates WCHL, a radio station broadcasting from Chapel Hill and “Chapelboro,” an on-line news and marketing service. Vilcom Real Estate Development owns properties in North Carolina and South Carolina. Print Shop operates a retail store in Chapel Hill.