Syntax-Brillian files for Chapter 11 bankruptcy

[lcaillo]

http://www.reuters.com/article/marke...0080708?rpc=44

July 8 (Reuters) - Television and digital camera maker Syntax-Brillian Corp (BRLC.O: Quote, Profile, Research, Stock Buzz), which has been plagued by management changes, delayed results and weak sales, said on Tuesday it filed for Chapter 11 bankruptcy protection.

The company, which sells the Olevia brand of LCD TVs, sought protection from creditors with the U.S. bankruptcy court in Delaware.

Syntax-Brillian also entered into a deal to sell certain of its assets to a newly created company called Olevia International Group LLC, which has agreed to assume $60.0 million of Syntax-Brillian's secured debt.

The Chapter 11 filing includes all of the company's units except digital camera unit Vivitar, which the company plans to sell. (Reporting by Pratish Narayanan in Bangalore; editing by Rory Channing)



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Syntax-Brillian Corp. filed a Chapter 11 bankruptcy petition Tuesday for all but one of its units, which it plans to sell off in a move that likely will see massive changes for the Tempe-based television maker.

Company officials announced they would sell off certain assets to the newly formed Olevia International Group LLC, which is owned by TCV group, a former original partner with Syntax-Brillian that provides television cases.

Olevia, also the brand name for Syntax-Brillian's televisions, will assume about $60 million of the company's debt.

Syntax-Brillian will continue to operate under Chapter 11, which allows for corporate reorganization, as the bankruptcy case works through the courts.

The move likely will expedite the sale to Olevia, said Greg Rayburn, the company's interim chief officer who was brought in earlier this year to steady the company.

"This process will allow us to operate business as usual, even as we address liquidity and leverage issues experienced in the past year. It will allow us to honor our commitments to our retail partners, suppliers, employees and consumers, continue to advance initiatives that improve and develop our product lines, and better position us to capitalize on the demand for our products going forward," Rayburn said in a statement released by the company.

The exception is the company's Vivitar unit, which makes still and video cameras. The company will attempt to sell off that business to another buyer.

Company officials expect its stock (BRLC) to be delisted from the Nasdaq Stock Market. Syntax-Brillian received notice on July 1 that its stock price had been below $1 on average for more than 30 days. Syntax-Brillian officials said they expected the stock to be delisted and be virtually worthless within 10 days of the bankruptcy filing.

Several board resignations also were reported recently. Submitting resignations were Vincent F. Sollitto Jr., James Ching Hua Li, Bruce Berkoff, David Chavoustie, Yasushi Chikagami and Max Fang. The only remaining board member is Michael Garnreiter, who subsequently fired Li as CEO on July 2.

The bankruptcy filing caps a massive fall for the company that at one point was gaining market share in distribution of its low-cost televisions. This spring, as the economy soured, the company announced it would be restating more than a year of financial records. It was threatened twice with delisting from Nasdaq, and was ordered to pay the Federal Communications Commission a $2.9 million fine for distributing televisions that did not include digital tuners after an FCC-imposed deadline.

Rayburn was brought in this April to help the struggling consumer electronics maker, and later that month it announced reorganizations and layoffs.

According to its last quarterly report filed, for the period ended Sept. 30, Syntax-Brillian reported sales of $151 million and a net loss of $13.5 million, or 15 cents a share.