Be­lea­guered Pan­tech files for bank­ruptcy pro­tec­tion

Korea JoongAng Daily - - Business & Finance - Bloomberg

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.

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