NEW YORK -Voice-recognition software maker Lernout & Hauspie Speech Products filed for Chapter 11 bankruptcy protection in early December, citing an unexpected cash shortfall from a South Korean subsidiary and an ongoing investigation into accounting improprieties.
The Belgium-based L & H makes several speech-recognition and language-translation titles. Company executives said a deal could not be struck with its lenders, forcing the move into Chapter 11 protection.
President/CEO John Duerden said the filing, which took place in Wilmington, Del., will allow the company to fix its financial problems while continuing to develop leading-edge software.
Daniel Hart, general counsel of L & H, said in a written release that "an important factor in the decision to seek reorganization protection was the recent discovery of a very significant cash shortfall on the balance sheet of the Korean subsidiary, the circumstances of which we will vigorously investigate with the assistance of external resources."
According to The Wall Street Journal, L & H executives discovered about $100 million missing from the company's South Korean subsidiary.
L & H will file for bankruptcy in Belgium, and its Dictaphone Corp. subsidiary is expected to follow its parent into bankruptcy court in Delaware today.