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SONICblue Plans Chapter 11

3/21/2003 01:00:00 PM Eastern

Santa Clara, Calif. - SONICblue and its Rio, ReplayTV, and Go Video subsidiaries will file for Chapter 11 reorganization as an interim step toward the sale of the three subsidiaries.

D&M Holdings, parent of Denon and Marantz, made a non-binding proposal to acquire SONICblue's ReplayTV and Rio units for $40 million, minus up to $5 million of assumed liabilities. D&M emphasized that it has not entered into a definitive acquisition agreement and that there's no assurance that the transaction will occur. Last week, D&M announced plans to buy audio maker McIntosh.

In a definitive agreement, SONICblue's Go Video subsidiary will be sold for about $12.5 million to Opta Systems, a subsidiary of investmentc-company Carmco. Opta's vice chairman, Roger Hackett, was SONICblue's former vice president of worldwide sales.

The purchases would have to be approved by U.S. bankruptcy court.

ReplayTV makes PVRs and has been sued by major TV networks over the devices' ability to send time-shifted programs over the Internet. The Rio unit developed the industry's first headphone MP3 player. GoVideo markets dual-deck VCRs, DVD players, and home-theater-in-a-box systems.

On Wednesday, SONICblue reported a $33.4 million net loss in the fourth quarter on a sales decline of 16 percent to $66.99 million.

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