Violin Memory’s Files Chapter 11 Bankruptcy

by San Antonio Attorney

Violin Memory filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the District of Delaware.  CEO Kevin DeNuccio said in a statement that the vendor is going to continue operations throughout the bankruptcy duration while expecting to find buyers of its assets.

The company hopes to emerge from bankruptcy in January.

Violin’s struggle is lack of customers, and has been failed to make profits after it became a public company in 2013.  The company has been unsuccessful in looking for a buyer, and its sales in 2016 are very low.

Violin has reduced spending through layoffs and salary cuts.  The number of 437 employees has been cut from 437 to 82.

DeNuccio’s pay was cut from $750,000 to $150,000.  The bankruptcy case placed the vendor’s monthly payroll at about $758,000 plus $109,000 each month in health benefits.  Violin stated that it also has an around $244,000 payables to employees for their sales commissions.

Based on the bankruptcy papers filed, Violin is going to possess $3.62 million in cash and that amount is going to down to about $1.6 million by January 2017.  The majority of operational costs within the six weeks duration are employee salaries.  So far, the vendor has sustained a total of $68 million loss this year.

Violin’s management has attempted unsuccessfully to get a buyer for about a year.  It even hired a financial adviser, who reached out to a number of financial and strategic sponsors.  Those efforts resulted in 10 entities carrying out management meetings and nine entities signing confidentiality deals.  However, not one of them submitted an offer.  Consequently, the vendor executed its reorganization plan.

If you have more debt than you could ever handle, filing for bankruptcy may be something to think about.  If believe that bankruptcy is your only option, talk to an experience attorney for Bankruptcy Help.

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