MandrakeSoft is looking at a Chapter 11-style bankruptcy, to solve its financial difficulties, according to a leaked email from one of its executives
New MandrakeSoft CEO Francois Bancilhon says the liabilities total about €2 million, but that he's weighing all possible choices for resolving the problems. The leaked email, however, paints a different picture. It describes specific plans to go with either Chapter 11 or its French equivalent.
The email, sent earlier this month, says going Chapter 11 would allow MandrakeSoft to renegotiate all liabilities and to clear out all other problems, because people could be sacked and contracts easily broken. Chapter 11 is a form of bankruptcy in the US in which companies try to reorganize. Management may continue to run the operations, although the bankruptcy court must approve all significant decisions.
The equivalent law in France, where MandrakeSoft is headquartered, is the "Law of 25th January 1985". MandrakeSoft also has a wholly owned subsidiary in the USA, and so could file under either.
"Going Chapter 11 is what that email says to me," an industry insider told The Register. "He didn't leave any options to that. And for the whole industry, this would be the worst case because it will continue a long time."
View: Full Story - Mandrakesoft files for bankruptcy?
News source: The Register
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