Webnotions, Inc, which owns the books marketplace A1books.com and is the parent company of Webnotions India Pvt Ltd which operates A1books.co.in, is facing Chapter 7 Bankruptcy proceedings (US LawWikipedia) in the US. According to a blurb in BusinessWeek, an involuntary petition for liquidation under Chapter 7 was filed on April 26th 2010 against WebNotions Inc in the US Bankruptcy Court for the District of New Jersey. An involuntary petition is filed by a creditor seeking to recover debt. A committee of unsecured creditors of Webnotions, Inc is being constituted, according to this filing (pdf).

Remember that Times Internet Ltd (Indiatimes) had acquired 50% in its Indian venture Webnotions Books India Pvt Ltd – which, according to our sources, was an ads-for-equity deal. Late last year, there was a report in the Economic Times that Webnotions was looking to raise $4-5 million to fund the expansion of its Indian venture.

We’ve contacted Webnotions, Inc founder and CEO Shinu Gupta, as well as Indiatimes for more details and comments. We’ll update when we have more details/responses.

P.s.: Thanks to a reader for pointing this development out in the comments. Feel free to use our anonymous tip-off.

Also see: Difference between Chapter 11 and Chapter 7 Bankruptcy

Indiatimes Picks Up 50 Percent Stake In Online Books Marketplace A1Books; A Private Treaties Deal