Consumer electronics maker
today announced that it will file for Chapter 11 bankruptcy protection with the United States Bankruptcy court of the Northern District of California, San Jose Division. The company plans to sell its ReplayTV and Rio business units to D&M Holdings Inc., the parent company of home electronics makers Denon Ltd. and Marantz Japan Inc.
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The agreement is non-binding, but if executed it would give SONICblue US$40 million in the transaction, less up to $5 million in liabilities. What’s more, SONICblue has announced a definitive agreement to sell its GoVideo business unit to Opta Systems LLC for about $12.5 million. Any such agreements will need to be signed off by the bankruptcy court first.
Opta Systems has a connection to SONICblue — the company’s Vice Chairman, Roger Hackett, is a former vice president of SONICblue and served for a decade as the CEO of Sensory science, GoVideo’s original developers.
SONICblue CEO Gregory Ballard conceded that his company’s business units would be better off with “better heeled owners.” He said that the sales of these business units and the Chapter 11 filing will enable SONICblue to continue operations while transition the individual business units to their new owners.
“The continued support of our manufacturers and retailers will play an integral role in our ongoing efforts to make the changes that will enable the continued growth and success of our products,” Ballard added.
SONICblue has received a credit agreement to provide $4 million in additional financing, and hopes to retain Houlihan Lokey Howard & Zukin Capital as financial advisors and Pillsbury Winthrop LLP as legal counsel. The company hopes to have the sale of its business units complete by the end of April.