PracticePeople In PracticeL&H plans ‘shares for debt’ deal

L&H plans 'shares for debt' deal

Troubled software developer Lernout & Hauspie, which is currently under bankruptcy protection, is considering setting up a new company in a bid to get creditors to take shares rather than cash.

With the two founders of the translation and speech recognition company out of the way in jail on fraud charges, Philippe Bodson, hired in January to rescue the company, said there were two options.

One is to transfer the business to another company under new investors and partners and let creditors take shares instead of claiming debts. The other is to sell off most of the company’s assets to pay creditors.

Shareholders have until 5 June to make a decision on the strategy and, if the vote is unanimous, bankruptcy protection may be extended for up to two years.

The company faces creditor claims of around Pounds 350m and is under scrutiny by the Securities and Exchange Commission for a series of ‘accounting errors’.

Links

L&H pair to spend extra month in jail

Lernout & Hauspie co-founders arrested

L&H publishes report over accounts hole

  • This article first appeared on vnunet.com

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