Beleaguered Pantech files for bankruptcy protection
Pantech, the Korean maker of mobile devices that’s facing fierce competition from Samsung Electronics, LG Electronics and Apple, has sought bankruptcy protection in the United States as it reorganizes at home.
The company, incorporated in Seoul, listed debts of as much as $1 billion and assets of as much as $500 million in a filing Friday in U.S. Bankruptcy Court in Atlanta.
Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while they reorganize abroad.
Pantech asked the U.S. court to recognize the proceeding pending before the Seoul Central District Court, Third Bankruptcy Division, as its “foreign main proceeding.” The company’s creditors agreed to put the company up for sale.
Sales “dropped due to intensifying competition among mobile device manufacturers and market saturation since 2012, and the dramatic drop of domestic sales due to business suspensions imposed by the Korea Communications Commission on mobile carriers in March 2014 led to significant strain on cash flow,” Pantech Chief Executive Officer Lee Joon-woo said in court papers.
The company in March submitted a debt workout plan to its creditors, and a receivership program began in August. Nine lenders agreed to the plan.
There are 14 U.S. patent lawsuits pending against Pantech in Texas, California, Delaware and Florida, court papers show.