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Court Dismisses Liberate's Bid for Bankruptcy

September 10, 2004|From Bloomberg News

Liberate Technologies Inc. said Thursday that a federal court had dismissed its bankruptcy petition, ruling that the company -- which had almost $1.25 billion in net losses in six fiscal years -- had enough cash to cover liabilities.

Liberate, a San Mateo, Calif.-based maker of software for television set-top boxes, said it would appeal the ruling and seek to reorganize under court protection. Bankruptcy law gives companies a chance to restructure under their own management before having to pay any debts.

"We firmly believe in our bankruptcy case and intend to vigorously appeal," David Lockwood, the company's chairman and chief executive, said in a statement. "The appeals process will continue in parallel with our plans to grow our business and to increase shareholder value."

Liberate sought protection from creditors in April in U.S. Bankruptcy Court in Wilmington, Del., listing $257 million of assets and $21.7 million of debts in court papers. In May, the company filed a plan to fully repay creditors and leave shareholders' investments intact. Liberate had cash and short-term investments of $222.3 million as of Feb. 29, according to the company's website.

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