Zenith files for Chapter 11

Former electronics giant takes only way out as LG steps in to take over

LG Electronics is to assume full ownership of Zenith Electronics, as the latter collapses into bankruptcy. Zenith makes a wide range of business and consumer electronics. It filed for Chapter 11 status yesterday at the offices of the US Bankruptcy Court in Wilmington, Delaware. It was once the leading TV set company in the US, but has struggled in recent years. The computers and IT division of Zenith was sold to Bull as Zenith Data Systems. This latest instalment in Zenith's history comes as no real surprise as the company had planned as long ago as last year to file for bankruptcy. It does so leaving debts of $200 million for LG to swallow. The transfer of debt was part of the deal which sees LG - already a majority shareholder in Zenith - assume full control. LG bought a 55 per cent stake in Zenith in 1995. It has described the fruits of this investment as "disappointing" which has to be one of the summer's best understatements. Last year, Philips pulled out of a deal to buy Zenith's TV tube manufacturing plant putting 2,000 jobs in jeopardy. ®

Sponsored: 5 critical considerations for enterprise cloud backup