chapter 11
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Lordstown Motors sues Foxconn and declares bankruptcy
The car manufacturer previously declared a $171.1 million loss for 2023's first quarter.
Faraday Future founder files for Chapter 11 bankruptcy
Faraday Future founder Jia Yueting has filed for Chapter 11 bankruptcy in a bid to settle his exorbitant personal debts. The move is part of a larger recovery plan, and it's meant, in part, to regain credibility for Faraday Future. Though there's no guarantee that it will help.
Aereo's video streaming fairy tale ends at Chapter 11
When a company files for Chapter 11 bankruptcy, it means that it's mere moments away from being torn to pieces by its creditors. That particular regulation also provides room for a turnaround, but given that the Supreme Court has essentially made its business model illegal, it's not looking good for Aereo. In a letter posted to the TV-streaming service's website, CEO Chet Kanojia tells former users that the challenges the company faced were "too difficult to overcome." In what can only be described as a farewell note, the CEO adds that he's hired restructuring expert Lawton Bloom, presumably to help sell off everything that isn't nailed down to pay off debt. So, farewell then Aereo, you tried to make watching TV easier and for that, you'll always have a place in our hearts. [Image Credit: Bebeto Matthews / AP Photo]
Apple fines companies $50 million for leaks
For a company that's obsessed with secrecy, it's no surprise to see that Apple imposes tight restrictions on what its suppliers can say. If your company leaks a product, or starts boasting about producing components for a future iOS device, then you'll be asked to pay a fine of no less than $50 million. That's chump change for a company like Samsung, but a fortune for smaller outfits that may produce only one or two small pieces. Speaking of which, this fact only emerged thanks to GT Advanced Technologies, which has just filed for Chapter 11 bankruptcy after deciding to close and sell-off its loss-making sapphire crystal manufacturing facilities.
Atari earns court approval to emerge from bankruptcy
Atari's Chapter 11 (reorganization) bankruptcy, announced in January and followed by auctions of its assets, is coming to its phoenix conclusion. The Wall Street Journal reports Atari has received court approval for its plan to rise from bankruptcy. The plan involves paying back the $3.8 million owed to bankruptcy lender Alden Global Capital. Once Atari is operating on its own, it'll also start paying $1.75 million to unsecured creditors over a stretch of three years. Those creditors are actually owed $10.3 million, but their agreement in the plan suggests that they're aware they'll probably never see that full sum again. It'll be interesting to see if the company can soar again, but we're pretty sure those E.T. cartridges will remain in their sandy slumber.
Atari US secures $2 million in financing, prepares to sell assets
After declaring bankruptcy last month, the US branch of Atari has closed $2 million in debtor-in-possession financing. Another $3 million is expected once the credit documents are filed and subsequently approved by the court. The company will use the funds to finance its current operations while "evaluating its strategic options" for restructuring.Pending court approval, Atari has also hired Perella Weinberg Partners, an independent advisory and asset management firm, to help evaluate said options. Part of that responsibility will be to aid in the sale of Atari's assets, which include everything from Pong to the company's logo. Anyone want to go halfsies on Combat?
Creditors, Trustee object to THQ sale conditions
Back when THQ filed for Chapter 11 bankruptcy last month, the plan was for the developer/publisher would be sold to Clearlake Capital Group in one big chunk within 30 days, preventing the need for layoffs and avoiding the need to split THQ's various franchises up and sell them a la carte. While this plan sounds like a best-case scenario for THQ given the circumstances, other parties involved in the process have doubts, and have subsequently filed official objections.There's a lot of complicated legal stuff going on, but the situation essentially breaks down like this: US Trustee Roberta DeAngelis has filed an objection over the sale's time table, saying that the 30-day window is far too small to give parties other than Clearlake Capital Group a chance to bid and participate in the sale. She also took issue with a stipulation in THQ's plan that awards $2.25 million to Clearlake in the event that a different company wins the bid; that amount is disproportionately large with respect to the cash value of the purchase price, she claims.A consortium of THQ's creditors have also filed an objection, claiming that THQ's proposed bidding procedures "appear to have been designed specifically to thwart any potential bidders from stepping forward to compete with Clearlake's bid," taking issue with the sale's time table and "requirement that prospective purchasers bid on the Debtors 'as a whole' rather than on a 'piecemeal' or 'title-by-title' basis."In essence, the creditors feel as though the process has been designed to keep THQ operational, rather than to pay back its debts: "Rather than being designed to maximize the value of the Debtors' estates, the Bidding Procedures, by design or otherwise, render the 'auction process' meaningless and virtually guarantee that Clearlake will be the ultimate buyer, thereby ensuring that the Debtors' management retain their positions within, and operating control over, the Debtors' organization."A hearing is scheduled for tomorrow, during which we're confident at least two lawyers will make more money than we'll ever see in our entire lives. They'll probably also talk about this stuff.
Unannounced THQ games from Vigil, Turtle Rock, more in bankruptcy filing
THQ's filing for chapter 11 bankruptcy includes a rundown of all of its current projects and lists a few unannounced games from Vigil Games, Turtle Rock, Relic Entertainment and Patrice Desilets, who is at THQ Montreal.Relic Entertainment is developing a project under a working title of "Atlas," set to launch in 2014, as well as Company of Heroes 2, the filing states.Turtle Rock Studios, previously involved in Left 4 Dead 2 and Counter-Strike Source, is developing a co-op, multiplayer action game called Evolve. THQ filed a trademark for Evolve in March.THQ Montreal is working on 1666, another trademark THQ filed in March.Vigil Games, the team behind the Darksiders series, is working on a game called Crawler. No more information about this project is revealed in the filing and this is the first murmur of its existence.THQ game director Jason Rubin tweets that all current projects are on track for their scheduled release dates, including Company of Heroes 2, Metro Last Light and South Park: The Stick of Truth, while Saint's Row and Homefront follow-ups are still a go.
A123 Systems becomes America's latest EV battery maker to file for bankruptcy
Having been riddled with setbacks, including a major recall of faulty batteries supplied to Fisker Automotive, Michigan's favorite EV battery maker A123 Systems has filed for bankruptcy. It has also announced the sale of its main business units to rival Johnson Controls in a deal pegged at $125 million -- a sad fraction of the billion dollars it raised since it launched in 2001 (not least from government grants). It seems that neither fresh lithium ion innovations nor a potential deal with Chinese investors were able to keep the company out of the red, which leaves A123 on the road to nowhere -- right behind that other DoE-sponsored hopeful, Ener1.
Kodak to sell the film business that made it so famous (update)
Kodak is selling off its renowned film arm in order to revive its moribund fortunes. It'll join sales of the company's patent portfolio, online gallery, commercial scanning, photo kiosk and theme park businesses so it can concentrate on a not-yet successful printer enterprise. It needs to raise more than $660 million to pay back creditors before it can emerge from Chapter 11, which it aims to do early next year -- but not in any form that we're likely to recognize. [Image Credit: MercerFilm] Update: The company got in touch to say that while those parts of the business are being put up for sale, manufacturing, sales and marketing of Kodak-branded film products (and motion picture products) will remain within the Eastman-Kodak company.
Kodak agrees to sell Gallery online photo service to Shutterfly for $24 million
Remember that Kodak Photo Gallery online picture service that we didn't use? It appears that years of shipping packed-in with the company's cameras have netted it some 75 million users, making it an asset that now-bankrupt Kodak has agreed to sell off to Shutterfly for $23.8 million. The deal isn't quite done yet, with Shutterfly's offer entered as a stalking horse bid while other buyers may also submit proposals before the process is targeted to close in the spring. This is all a part of Kodak's pivot away from digital cameras and related products as it focuses on enterprise services and desktop printers instead. Under the current agreement, current gallery customers uncomfortable with being shipped off to Shutterfly will be able to opt out and either download their stored pics or buy them on DVDs. Otherwise, their accounts will be transferred in a way that is "preserved, and protected" -- that is to say, almost entirely unlike the way they're handled on iOS and Android.
Elpida files for bankruptcy protection as debts of $5.5 billion are revealed
DRAM Maker Elpida has petitioned for a corporate reorganization (the equivalent of Chapter 11 or Administration) as the company has revealed it is close to collapse. President Yukio Sakamoto is expected to resign as the scapegoat for the calamity as it files for protection at the Tokyo District Court. The company, founded in 1999 as NEC Hitachi Memory Inc. has produced DRAM Products since 2000. It founded three wholly-owned subsidiaries: Tera Probe, which conducted wafer probe testing, Akita Elpida Memory Inc. which handled the back-end processes of DRAM production and Rexchip Electronics Corp, which handled the front-end. After a blockbuster period of invention, a fall in prices and the global recession in 2006 forced the company to enter restructuring with a 30 billion Yen ($372.54 million) Government-backed loan. That swathe of cash was used to pump more money into investment and R&D, but the combination of strong Yen and the Thailand flooding has once again forced the company to come clean about its finances. It revealed today that it had debts of 448,033 million Yen, or $5.5 billion and without the protection of the court wouldn't last too much longer. Times of Japan points to the strength of Samsung's memory offerings as being a big contributor to Elpida's collapse, with president Sakamoto saying that DRAM is now as cheap as a "rice ball."
Kodak gets court approval to borrow $950 million, end theater sponsorship
Kodak took another step along the road to recovery yesterday, after receiving court approval to borrow $950 million in restructuring funds. Nearly a month after the camera maker filed for Chapter 11 bankruptcy, US Bankruptcy Judge Allen Gropper granted Kodak's request on Thursday, allowing the company to continue operations during its ongoing transition. Gropper's decision, handed down in a Manhattan court, follows a series of negotiations between Kodak and its lenders, and adds an extra $300 million to the $650 million awarded during January's Chapter 11 filing. The company is also allowed to end its sponsorship of the Kodak Theatre in Los Angeles, after successfully arguing that doing so would be in the best interest of Kodak and its creditors. Under the deal, Kodak is obliged to pay $72 million over the course of 20 years. It currently shells out $3.6 million per year and still has $38 million in outstanding payments, but Kodak's lawyers argued that the agreement was too costly. Kodak Chairman and CEO Antonio Perez issued the following statement in response to yesterday's decision: "Today's agreement is another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines."
Apple wants to file patent lawsuit against Kodak, fully aware that Kodak's bankrupt
Poor Kodak just can't catch a break these days. Nearly a month after filing for Chapter 11 bankruptcy and mere days after shuttering its digital camera business, the sputtering company now finds itself the target of no less a behemoth than Apple. Yesterday, Cupertino's legal team asked a US Bankruptcy Court for permission to go after Kodak on two legal fronts: with a patent infringement lawsuit in a Manhattan district court, and a corollary complaint in the ITC. According to Bloomberg, Apple's patent suit focuses on technologies that Kodak uses in its line of digital cameras, printers and digital picture frames. Unfortunately for Kodak, printers are one of the product areas it recently decided to focus on, as confirmed in last week's restructuring announcement. Salt, meet wound.These two companies, of course, have been involved in an ongoing ITC battle over Kodak's image transfer technology, with the latest salvo coming last month, when the camera company launched a fresh batch of litigation against both Apple and HTC. If the bankruptcy court grants Apple's request, the company will head straight to court, in the hopes of obtaining a block against Kodak's allegedly infringing products. Kodak, meanwhile, could file a request to hold off the district level case until the ITC ruling comes through, though Apple said yesterday that it would press forward, regardless. The company was also quick to point out that it's not legally bound to request permission to sue a court-protected bankrupt company, but did so "out of an abundance of caution," which is really considerate, if you think about it.
Battery maker Ener1 files for bankruptcy, tied to Think Global's bumper
Nobody was that surprised when EV maker Think Global drove off into the Chapter 11 sunset, but now it's towed an even bigger company along with it. Ener1 invested heavily in Think and also manufactured the lithium-ion batteries for its cars, but all it got in return was a lethal $69 million hole in its balance sheet. The company was de-listed from Nasdaq last month and now it's seeking bankruptcy protection to restructure $81 million in debts. If it fails to get its finances in order, organizers of the 2014 Winter Olympics may need to look for another power source.
Kodak files Chapter 11 bankruptcy, expects to complete restructuring by 2013
Apparently suing Samsung (again) wasn't the only pressing business for Kodak today, as it just announced it has -- as expected -- filed for Chapter 11 business reorganization in New York. You can read the details in the press release after the break or at the Kodak Transforms website, where Chairman and CEO Antonio Perez is quoted saying he hopes Kodak will "emerge a lean, world-class, digital imaging and materials science company". The company has obtained $950 million debtor-in-possession financing, which it claims will provide the liquidity needed to continue operations during the restructuring. As far as its recent parade of lawsuits against Samsung, Apple and HTC, Perez comments on "monetizing non-core IP assets" so we'd assume its lawyers will stay busy going forward.
Kodak's stock price exploded after restructuring announcement
It's only January 10th and Kodak's already having a terrible year: six days ago the beloved photography company was preparing for Chapter 11, but today its stock price leapt by 45 percent (and counting). The cause? The announcement of a new plan intended to pull the troubled company into the 21st century and, more importantly, into the black. It's planning to simplify its business structure down to two divisions and reduce costs while pushing its successful range of printers. We've got the announcement after the break but hopefully we'll see the century-old company live to see another day.
The Kodak Moment it never wanted: company reportedly prepping for Chapter 11 filing
Tough to smile in times like these, folks. Barely three years after yet another staple in the photography business filed for Chapter 11, Kodak is reportedly getting its paperwork in order to do the same. The Wall Street Journal has it that bankruptcy protection is looking all the more likely in the coming weeks, as its efforts to hawk a "trove" of digital patents proved to be in vain. As it stands, the employer of around 19,000 is currently working with lenders to secure around $1 billion in debtor-in possession financing to keep it alive during the actual bankruptcy process. Should this all pan out, its portfolio of 1,100 patents would then be re-listed via a court-supervised bankruptcy auction. Oh, and to make matters worse, it warned earlier in the week that it could be delisted from the New York Stock Exchange after Kodak shares closed at under $1 for thirty straight trading days.
TerreStar makes it official, files for Chapter 11 bankruptcy
Teetering no longer. According to Reuters, satellite phone maker TerreStar has filed for Chapter 11 bankruptcy to protect itself from liabilities in the range of $1.6 billion. As expected, a restructuring is in order, with Blackstone Group LP providing financial advice for such a move. One of TerreStars' creditors, EchoStar, is offering $75 million in financing to help keep the company operate while it goes through the bankruptcy. Shame that it's the icing on the cake for its Genus, having just launched on AT&T not one month ago. Them's the breaks. [Thanks, Brian]
TerreStar teetering on bankruptcy?
Okay, look, guys -- we know putting a satellite into space is a pricey endeavor -- just ask Sirius XM -- but you literally just launched your first commercial device, the Genus, and we don't think that "launch a device then immediately declare bankruptcy" is a particularly sound business model. They're not there yet, but sure enough, the WSJ is claiming that newly-minted satphone operator TerreStar could be just days away from filing for Chapter 11 as it bears the brunt of around $1 billion in debt, possibly in the form of a well-structured and prearranged bankruptcy on the heels of discussions with the company's creditors. Seeing how restructuring does seem like the most likely scenario here, we wouldn't necessarily let this scare anyone off from buying a Genus -- but at $799, we doubt many of you were planning on running out this week and picking it up anyway. Echoes of Iridium, anyone?
