A hearing today in Lernout & Hauspie's U.S. bankruptcy case may answer the question "What happens next?" now that a Belgian court has handed over the once-giant speech technology firm to five curator-trustees.
Attorneys for L&H employees, creditors and advisors said they had no answers because there is no protocol, or agreed-upon working relationship, between Belgian and U.S. courts.
Last week, U.S. Bankruptcy Judge Judith Wizmur agreed, at the request of L&H's lead U.S. lawyer, Luc Despins, to postpone until today a hearing in Camden, N.J., originally set for last Friday. Despins needed the time to fly to Belgium and meet with officials there.
The revised agenda includes motions to approve the recent sale at auction of L&H's medical transcription business, and to establish guidelines for a November auction of its core speech recognition business.
But a knowledgeable source close to the case said that the Belgian court indicated it did not have confidence in the financial projections of L&H's plan of reorganization.
L&H filed for bankruptcy protection from creditors in Belgium and in the U.S. court in Delaware in November last year after financial scandals rocked the company, dropped its market value from $10 billion to less than a billion and later sent its two founders and two other executives to jail.
The company has about $460 million in debts, including loans of more than $300 million owed to five European banks. Asset sales already completed and those pending barely dent the debt.