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Easi List
Hopefully when this corporation restructures, the cost of voice controlled technological products will go down somewhat.
Ruth
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Ruth Burchell
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L&H Gets Bankruptcy Protection
http://www.nytimes.com/aponline/world/AP-Belgium-Lernout-and-Hauspie.html
January 5, 2001
By THE ASSOCIATED PRESS
Filed at 10:33 a.m. ET
IEPER, Belgium (AP) -- A judge on Friday granted bankruptcy
protection to Lernout & Hauspie, the once high-flying company that
made billions with voice-controlled computer technology and wowed
firms like Microsoft and Intel before crashing amid accusations of
financial misdeeds.
The company chairman later indicated Lernout's restructuring plan
includes cutting about 1,200 jobs, or about 20 percent of its work
force.
Saying there is ``no doubt there was fraud'' at Lernout & Hauspie,
Judge Michel Handschoewerker cleared the way for the Belgian
company to seek immediate protection from creditors while it
restructures. He added that some board members should be removed.
L&H's bankruptcy filings followed the discovery of a series of
accounting problems, including a $100 million cash shortfall at its
Korean unit. An audit-committee report last month also detailed
numerous sketchy transactions, accusing the company of listing
revenue before contracts were even signed and backdating contracts
-- among other things.
The company, which also has offices in Burlington, Mass., grew to
be a world leader in speech technology software -- products that
allow computers to be controlled by voice commands. It attracted
multimillion-dollar investments from top firms like Microsoft and
Intel before revelations of improprieties last year sent it
plummeting.
Since then, the company has lost almost all of its share value --
some $10 billion. It has been delisted from the Nasdaq and Easdaq
exchanges and sees bankruptcy protection as a final attempt to save
itself.
Lernout & Hauspie refiled for a so-called concordat -- the Belgian
equivalent to Chapter 11 bankruptcy protection -- last week. The
court had rejected its first petition Dec. 8 as poorly prepared and
insufficient.
After Friday's ruling, chairman Roel Pieper said the company's plan
includes laying off 1,200 employees -- about 20 percent of the
firm's work force in 40 countries.
``This is a difficult phase but certainly necessary,'' Pieper said
after the court session. ``We will start immediately the process of
setting things right.''
Co-founder Pol Hauspie is also under investigation for possible
fraud after investigators last month found an undisclosed amount of
money in his private bank account that could not be accounted for.
Hauspie's lawyer, Frank Van Leemput, said Friday the amount was
``less than $1 million.'' He declined to say where the money came
from but said ``everything can be explained.''
The cost-cutting plan won approval Thursday in the United States,
Pieper said, adding that the company has the financial backing to
carry it out.
The company has been operating under bankruptcy guidelines in the
United States since late November. The bankruptcy filings followed
the discovery of a series of accounting problems, including a $100
million cash shortfall at its Korean unit.
A L&H audit-committee report last month detailed numerous
questionable transactions. It recommended that the board consider
taking ``disciplinary action'' against co-founders Jo Lernout and
Hauspie, former chief executive Gaston Bastiaens and former vice
chairman Nico Willaert.
All except Lernout resigned from their board positions the day the
report was presented to L&H's board in late November.
The company's main creditors are a group of five banks that put
forward a $400 million loan to finance Lernout & Hauspie's
acquisition of Dictaphone Corp. in the United States last year. A
short-term loan of $180 million falls due March 31.
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