Troubled by 2002 net and operating losses and recent litigation, hardware maker Sonicblue - who rolled out their new ReplayTV 5000 model at January's Consumer Electronics Show in Las Vegas - has filed for Chapter 11 bankruptcy protection.
The filing means the hardware maker will keep operating long enough to sell its main subsidiaries, ReplayTV (digital recorders) and Rio (MP3 players), before taking bids on the rest of its assets, CNET.com reported March 21.
"In the end, we and our financial advisers have concluded that the best outcome for our creditors and our employees is to sell our businesses to better-heeled owners," chief executive officer Gregory Ballard said in a formal statement. The company has signed non-binding letters of intent to sell ReplayTV and Rio to a pair of Japanese companies, D&M Holdings and Marantz Japan, for an estimated $40 million, CNET said.
Two days before the bankruptcy filing, Sonicblue warned that fourth quarter net losses could mean further trouble for the already-struggling hardware maker. The company said at that time thatthey lost $33.4 million (34 cents a chare) for the quarter ending in December with an operating loss of $15 million (15 cents a share).
In November 2002, Sonicblue and rival TiVo settled a patent infringement suit the two companies had fired at each other. Sonicblue had spent much of the time since trying to find buyers without having to consider bankruptcy.
