Silicon Graphics Inc. (SGI), the perma-struggling workstation-turned-server-maker, filed for bankruptcy protection today, and was immediately bought by Rackable Systems for $25m cash.

Rackable has signed to take on of SGI liabilities. The deal is expected to complete in 60 days.

"This combination gives us the potential for significant operational synergies, a strong balance sheet, and positions the combined company for long-term growth and profitability," said Rackable CEO Mark Barrenechea.

SGI recently laid off more than 15 per cent of its workforce, leaving it with about 1,155 staff. The move wasn't sufficient to save it as a standalone firm however.

Today's Chapter 11 filing is SGI's second in three years. It last went titsup in May 2006 with debts of $664m. The subsequent reorganisation didn't help matters much; SGI's most recent quarterly results revealed an operating loss of $38.2m and rising.

It's expected that SGI will continue business operations while the deal goes through. Its international operations would be part of the sale, but are not part of the US bankruptcy. ®

Related stories

• SC09 SGI previews UltraViolet Nehalem EX blade clusters (16 November 2009)
• SGI-Rackable combo posts big revenue gains (4 November 2009)
• SGI chases Cray with baby cluster (6 August 2009)
• SGI renews Itanium super love (sort of) (27 July 2009)
• Rackable Systems slips into SGI's name (11 May 2009)
• Rackable serves up $13.4m in losses (5 May 2009)
• Rackable free to pick SGI carcass (1 May 2009)
• LSI mans up on bandwidth (22 April 2009)
• Comment SGI's Rackable's future supercomputers (1 April 2009)
• SGI lays off another 9 per cent (3 March 2009)
• SGI right at home in red ink (7 February 2009)
• SGI slashes 15 per cent of its workforce (15 December 2008)
• SGI shows off Molecule concept machine (20 November 2008)
• SC08 SGI preps supers for future Intel chips (20 November 2008)