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Cerplex Group to Convert Chapter 11 to Liquidation

Tech: The Irvine company has raised less than $5 million via asset sales. Debt tops $40 million.

February 01, 2001|From Times Wire Services

Computer-repair provider Cerplex Group Inc., which filed for bankruptcy protection last year to facilitate sale of its subsidiaries, said Wednesday that it will convert its Chapter 11 reorganization to a Chapter 7 liquidation.

The Irvine firm said in a news release that it filed a notice to convert its status with the U.S. Bankruptcy Court in Delaware.

The company and its Cerplex Inc. subsidiary already have sold all operating companies, raising less than $5 million.

At the time it filed its bankruptcy petition in July, Cerplex listed assets of $10 million and debts of $40.5 million. Cerplex executives said in May that the company was having trouble paying its bills because of recurring operating losses.

The company's decision to file its bankruptcy petition came after five holders of debt securities worth $13.5 million sought in June to push the company into an involuntary bankruptcy, which would likely have led to the removal of top management.

Instead, Cerplex sought protection voluntarily and, at the same time, entered into an agreement to sell four of its five operating units to Dutch rival Teleplan International NV. It later sold its British repair and parts business to a joint venture between Teleplan Holdings Europe BV and A Novo SA.

Under its planned liquidation now, Cerplex said in its statement that it expects that a trustee will be appointed to supervise the sale of remaining assets.

Shares of Cerplex, which reported $93.3 million in 1999 sales, last traded over the counter Monday at 1 cent each. The shares rose to a 52-week high of $1.03 a year ago. The stock had peaked at $15.75 a share in 1994 after an initial public offering was sold at $11 a share.

Bloomberg News and Dow Jones Newswires were used in compiling this report.

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