Blue Springs company shuts down, lays off 250 after bankruptcy and court battle with rival

This version of the story has been updated to correct the number of employees laid off at Xceligent to 250.

About 250 local employees are out of work in the midst of holiday season after Blue Springs commercial real estate listing company Xceligent shut down late last week.

Employees were given 30 minutes to leave Xceligent’s offices last Thursday, according to two former employees. That was after the company filed for liquidation in U.S. Bankruptcy Court of Delaware. Most of the company’s operations were in Blue Springs and Sedalia in Missouri and Overland Park, Kan.

Xceligent, founded in 1999, can be roughly described as the Zillow of commercial real estate. The company researches and collects data about commercial property — square feet, property values, vacancy rates and so on — and posts it online for subscribers.

Xceligent’s majority owner was Daily Mail and General Trust (DMGT), a multinational company traded publicly in London.

The company had been on an aggressive path to expand into several major markets, most notably in New York. The research operation was an expensive one, and DMGT officials said Xceligent had been losing money.

“This is a loss making business where we have been investing to expand it across the U.S.,” DMGT chief financial officer Tim Collier said in a Nov. 30 earnings call with analysts. In the call, he revealed that DMGT was writing off Xceligent’s value to the tune of 42 million British pounds, or about $56.4 million.

“We have literally been collecting data one city at a time, an incredibly labor intensive process.” Collier said.

“This year, we expanded into the U.S.’s largest market, New York City, and quite candidly, the revenues were disappointing. And that suggests a longer and more challenging path to profitability for Xceligent.”

Xceligent was an upstart in its industry and became locked into a bitter and costly legal battle with its dominant firm, Washington D.C.-based CoStar.

CoStar filed a lawsuit last year alleging that Xceligent systematically stole CoStar’s copyrighted material for its own use. The lawsuit claimed that Xceligent took shortcuts in its research by pulling copyrighted photographs and other data and presenting it as its own.

Xceligent had denied those charges, said CoStar was picking a fight to keep its monopolistic hold on the business and responded with an antitrust lawsuit against CoStar.

In October, a separate lawsuit between CoStar and a company called RE BackOffice that Xceligent used to outsource commercial real estate research, resulted in damaging admissions from Xceligent’s vendor. RE BackOffice said in a court document that Xceligent’s management directed the vendor to pull content from CoStar’s websites.

Xceligent at the time denied RE BackOffice’s claims, suggesting that the firm had been bullied into making the admissions by CoStar. But shortly after, Xceligent’s founder Doug Curry and other company leaders were replaced.

This story was originally published December 18, 2017 at 10:34 AM with the headline "Blue Springs company shuts down, lays off 250 after bankruptcy and court battle with rival."