MiniScribe seeks Chapter 11 protection, posts $116 million loss for nine months

Article Abstract:

MiniScribe Corp, the disk drive manufacturer plagued by severe financial problems, will post a $116 million loss for the first nine months of 1989 and file for protection under Chapter 11 of the federal bankruptcy code. MiniScribe has a negative net worth as of Oct 1, 1989, of $150 million. The Chapter 11 proceedings will protect Miniscribe from creditors and plaintiffs in more than a dozen suits against the company while it plans a reorganization. The suits claim that former MiniScribe management used false financial statements to solicit investors. An investigation into the allegations revealed 'massive fraud.' After a brief suspension of trading in common shares, stock prices rose slightly, but fell back to previous levels by the close of business.

Cases, Disk drives, Bankruptcy, Computer storage device industry, Stockholder, Legal Issues, Lawsuits, Financial Stability, Losses

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MiniScribe sets special charge of $40 million; company will phase out all U.S. manufacturing; data deadline is Friday

Article Abstract:

MiniScribe, manufacturer of hard-disk drives, will phase out all US manufacturing, and is taking an additional charge to earnings in the 2nd qtr of about $40 million, which is recommended by auditors. The company, which has has said it falsified financial data, reported that the charge to earnings will increase negative net worth to approximately $130 million as of July 2, 1989. MiniScribe is racing to meet a Dec 8, 1989 deadline to file restated financial results for the past four years and has not filed a financial statement in 1989. If Friday's deadline is not met the company faces delisting by the National Association of Securities Dealers.

Computer industry, Economic aspects, Profits, Manufacturing, Fraud, Divestiture, Hard disk drives, Divestment, Profit, Hard Disk Drive, Second Quarter

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Similar abstracts:

• Abstracts: MiniScribe's investigators determine that 'massive fraud' was perpetrated. Cooking the books: how pressure to raise sales led MiniScribe to falsify numbers
• Abstracts: Disk-drive firm steers back from brink; Storage's net rises; tape system fuels strength. MiniScribe Corp. shows $88 million negative net worth

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