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Celerity May Seek Chapter 11 Protection as Cash Runs Out

April 01, 1988|CHRIS KRAUL | San Diego County Business Editor

SAN DIEGO — With its cash about to run out, Celerity Computing said Thursday that it may seek protection under Chapter 11 of the federal bankruptcy code or discontinue operations in April unless it can soon arrange a sale of the company or find the financing that has eluded it for the past several months.

The manufacturer of high-powered computers for engineering and scientific markets said it was also evaluating proposals that it sell its customer service operation. But such a sale would only give Celerity another 30 to 60 days in which to arrange a sale of the company or additional financing, the company said in a statement.

Celerity said in January that it had cut its 100-person work force in half and that it would need additional financing over the following three months to survive. Sales were hurt because of a shortage of parts from a sole-source supplier, and the company was forced to delay the introduction of its new Celerity 6000 model.

Celerity president Stephen Vallender was not available for comment Thursday. The company's chief financial officer Ambrose LaRocco resigned recently and has not been replaced, a Celerity spokeswoman said.

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