On Sept. 30, Interphase Corporation, a major information and communications technology company, announced that it had voluntarily filed for Chapter 7 bankruptcy protection.
On Sept. 30, Interphase Corporation, a major information and communications technology company, announced that it had voluntarily filed for Chapter 7 bankruptcy protection. According to a Street Insider report, the company has halted operations in its locations in North America, the Pacific Rim and Europe and plans to liquidate all of its remaining assets.
Interphase Corp becomes insolvent
In its bankruptcy documents, Interphase Corp. cited the global economic crisis and the slowdown in certain markets, as well as its dependence on a few powerful customers, as the primary reasons it sought Chapter 7 bankruptcy protection. According to Seeking Alpha, the company also stated that significant changes in product demand, reduced spending on communications and information tech improvements, as well as the fact that an increase in lower cost competition in the market contributed to its insolvency.
Interphase reported that its debt load reached $45.9 million in 2015 due to mounting losses over the previous 12 months. In fact, the company has experienced more than $1.5 million in net losses for the year, with another $1.3 million in operating capital reductions.
For a company that once boasted Alcatel-Lucent, Flex, GENBAND, Hewlett Packard Enterprise, Samsung and Sanmina among its clientele, these recent losses proved too much to overcome.
Common stock de-listed from the Nasdax index
Following a 98.02 percent drop in its share price for the year, which included an 85.67 percent drop over the previous four weeks, the company stated that Chapter 7 bankruptcy protection was its only option. The company has continued to be beaten by the Nasdaq index this year, which drove down its market cap to just $360,000. Further, since September 2014, Interphase Corp.’s shares have plummeted 98.65 percent, with an average quarterly performance of 93.33 percent.
As a result of these massive losses, Nasdaq Stock Market announced that effective Oct. 12, Interphase Corp.’s common stock would be de-listed from the index. Leading up to that de-listing date, all trading of the company was suspended. This was due to its voluntary filing for Chapter 7 bankruptcy protection.
The company plan
Interphase Corp. filed its Chapter 7 bankruptcy in the United States Bankruptcy Court for the Eastern District of Texas, Sherman Division. Under a Chapter 7 bankruptcy filing, a trustee will be appointed by the Office of the United States Trustee, and there will be an orderly liquidation of company assets in accordance with the Bankruptcy Code.
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