L&H files for Chapter 11
'Very significant cash shortfall'
Belgian software outfit Lernout & Hauspie today filed for Chapter 11 bankruptcy protection in the US.
The speech technology company, which also plans to file a similar petition under Belgian law, said it would continue operating and would reorganise its business in an effort to get back into the black. Today's move also affects its Dictaphone Corp unit.
L&H blamed the filing, made in the US Bankruptcy court in Wilmington, Delaware, partly on "a very significant cash shortfall" on the balance sheet of its Korean subsidiary.
"We have tried, without success, to reach an acceptable accommodation with our bank lenders," said John Duerden, L&H president and CEO in a statement. "After an intensive analysis of L&H's world-wide business operations and a careful assessment of its financial position, we concluded that a voluntary reorganization filing is both prudent and necessary to preserve and rebuild our valuable customer base and technology assets."
Earlier this week co-founder Pol Hauspie quit L&H's board following revelations that the company would have to revise the past two and a half years of its books due to accounting irregularities.
The company saw its share price peak at $72.50 in March but drop to below $7 this month before trading in the stock was suspended. It is also under investigation by the Securities and Exchange Commission. ®