BenQ Mobile product line - Image courtesy ZDNet
BenQ Mobile hits bottom and sees little hope of coming up
In September of 2006 BenQ Mobile, also known as BenQ-Siemens, filed for insolvency when
the Taiwanese manufacturing company was unable to find investors.
The insolvency proceeding was
opened in Germany on Monday. Insolvency, when a company's liabilities exceed it's assets, typically
leads to liquidation in Germany, even though the bankruptcy laws are very
similar to U.S. Chapter 11 provisions.
According
to statements made to Heise, the company was to be liquidated if an agreement was
not made with investors by the end of 2006. However, with the hearings still in
progress, the company has a little more time, although the outcome
looks grim. If a single board member decides to liquidate in order to cover
the company liabilities, the entire company will be liquidated. In the
unlikely event that the proceedings favor restructuring instead of liquidation,
the court will appoint new management to run the company. Even then, the
court-appointed management can decide to liquidate what assets are left of the
company.
BenQ Mobile was created through BenQ's buyout of Germany-based Siemens
Mobile. BenQ was paid $97.5 million to take over the Siemens division in
October 2005. This buyout was supposed to be BenQ's bridge into the
mobile technologies market, but the company did not post a profitable quarter
in the one year span under BenQ control.
In Germany, the law allows a company three months after bankruptcy has been filed before a formal insolvency
hearing begins. According
to CNET.com, if BenQ fails to find investors before their 3 month
grace period, over 3,000 employees could lose their jobs.
As part of the Siemens acquisition, the BenQ conglomerate retained control over
Siemens patents and intellectual property. In the event the company is
liquidated, BenQ will retain much of this intellectual property.
Given BenQ's near-unwillingness to compete after the 2005 acquisition, the
insolvency hearings will also weigh the conglomerate’s long-term benefits for
holding onto this IP.
More information on BenQ's proceedings will be released on Wednesday at the
closing of the insolvency proceedings.
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