Receiver takes control of Nestor Inc.

NESTOR TRAFFIC SYSTEMS and its parent company, Nestor Inc., have been taken over by a court-appointed receiver, Pawtucket attorney Jonathan N. Savage. /
NESTOR TRAFFIC SYSTEMS and its parent company, Nestor Inc., have been taken over by a court-appointed receiver, Pawtucket attorney Jonathan N. Savage. /

PROVIDENCE – A Superior Court judge on Wednesday appointed an interim receiver to take over management of Nestor Traffic Systems and its money-losing parent company, Providence-based Nestor Inc.

Acting on a petition by attorneys for Nestor’s board of directors, R.I. Superior Court Judge Michael A. Silverstein appointed attorney Jonathan N. Savage, a partner at Shechtman Halperin Savage LLP in Pawtucket, as the troubled company’s interim receiver.

Savage, acting on behalf of the court, has taken control of Nestor’s assets and day-to-day operations. He will try to sell off Nestor’s assets to investors or other prospective buyers, according to a news release. The court will hold a hearing in three weeks to decide whether to appoint Savage as Nestor’s permanent receiver.

Nestor Inc., which is incorporated in Delaware but based in Providence, has been losing money for an extended period, and has seen significant turnover among its board members and top executives in recent months as its financial condition apparently worsened.

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Nestor’s troubles have reverberated as far away as the small city of Lima, Ohio, where Mayor David Berger this week cancelled a municipal contract with Nestor Traffic Systems after learning of the company’s financial troubles, The Lima News reported. Berger had also gotten an earful from residents about the number of speeding violations the company’s newly-installed cameras were capturing, the paper said.

“I want to assure our customers they will continue to receive advanced technologies and high quality service during this time,” Michael C. James, Nestor’s interim CEO, said in a statement today.

“The board of directors made the proactive and voluntary decision to seek court protection of our assets and operations,” he said. “I am confident Nestor will emerge from receivership better positioned to service our municipal partners and continue to grow the company. I plan to work closely with the receiver to ensure the continuity of operations.”

Nestor had $22.1 million in assets and $26.1 million in liabilities as of Sept. 30, 2008, the last time the company filed a report with the Securities & Exchange Commission. At the time, it posted a third-quarter loss of $3 million on revenue of $3.83 million.

The company said it has 55 employees in Rhode Island and 25 more elsewhere in the country.

Nestor Inc. provides automated traffic safety and enforcement systems and services to municipalities in California, Georgia, Maryland, Virginia, Ohio, Delaware, Iowa, Texas and Florida, as well as in Canada. The company is headquartered in Providence, with regional offices in North Hollywood, Calif., and Akron, Ohio. Additional information is available at Nestor.com.

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