WASHINGTON (dpa-AFX) - Digital home entertainment provider Trident Microsystems, Inc. (TRID), along with its Cayman subsidiary, Trident Microsystems (Far East) Ltd., has filed Wednesday a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the District of Delaware.
Trident noted that all other operating subsidiaries of Trident will continue to operate in the ordinary course of their businesses, and are not subject to the Chapter 11 proceedings. Meanwhile, Trident said it will also shortly file for protection in the Cayman Islands.
'A combination of increased pricing pressures in our industry, lower demand in consumer electronics, and slower than anticipated new product adoption has contributed to increased operating losses, a deterioration in liquidity and an erosion in equity values for Trident,' Trident CEO Dr. Bami Bastani said in a statement.
The bankruptcy protection filing is expected to enable Trident to conduct its business operations in the ordinary course. It is also seeking approval from the court for a variety of First Day and other initial motions, including requests to make wage and benefit payments to employees and continuation of its global cash management system.
Sunnyvale, California-based Trident also agreed to sell its Set-Top-Box (STB) system on a chip (SoC) business to Entropic Communications, Inc. (ENTR), and is exploring strategic alternatives for its remaining business units. The deal, expected to close in late February 2012, has the approval of the Boards of Directors of Trident and Entropic.
Entropic said it has filed an asset purchase agreement as 'stalking horse' bidder to purchase the set-top box business for $55 million in connection with Trident's Chapter 11 bankruptcy filing.
Trident said it is seeking approval from the bankruptcy court and the Cayman court for the sale of its Set-Top-Box business, while continuing to operate the rest of its business lines in the ordinary course with the ample liquidity it has to do so.
Additionally, Trident also entered into a license agreement with RDA Technologies, Ltd. to grant RDA a non exclusive license to its SX-5 SOC product for the television market for an upfront fee of $7.5 million and an additional $8.5 million in the near term.
TRID closed Tuesday's regular trading session at $0.20, down $0.01 on a volume of 0.41 million shares, lower than the three-month average volume of 1.26 million shares. In the past 52-week period, the stock has been trading in a range of $0.15 to $1.70.
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© 2012 AFX News
