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.
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
