Original URL: http://www.theregister.co.uk/2013/10/02/nixed_nirvanix_files_for_chapter_11/

Nixed Nirvanix files for Chapter 11

Down the hatch in an orderly manner

By Chris Mellor

Posted in Business, 2nd October 2013 00:48 GMT

Cloud storage startup Nirvanix that imploded last month, has formally admitted business defeat by filing for Chapter 11 bankruptcy.

It announced the fact on its website on October 1, saying:

On October 1, 2013, Nirvanix voluntarily sought Chapter 11 bankruptcy protection in order to pursue all alternatives to maximize value for its creditors while continuing its efforts to provide the best possible transition for customers.

In other words, it does not have enough cash to pay its creditors.

The company is working to help customers move their data to IBM SoftLayer, Amazon S3, Google Storage, or Microsoft Azure. IBM OEM'd the Nirvanix service as part of its SmartCloud service, and Nirvanix says, "We have an agreement with IBM, and a team from IBM is ready to help you."

Dell had a partnership with Nirvanix.

With its Chapter 11 filing Nirvanix can reorganize itself, as a debtor in possession, under the protection of US bankruptcy laws expressed through a federal bankruptcy court.

It is – relatively – good news for customers that Nirvanix is looking after their interests as best it can in the circumstances. Hopefully the incidences of data loss will be few. For the VCs, the incidences of dollar loss look likely to be huge. That's why it's called "Venture" Capital; the money is at risk. ®