Computer Software Innovator Files for Bankruptcy
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Computer Software Innovator Files for Bankruptcy

January 6, 2012

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Trident Microsystems, Inc., which manufactures integrated circuit chips and other software for computers and television set-top boxes, recently filed for bankruptcy in order to escape a debt crisis caused by the recent economic recession.

In its bankruptcy filing, which was filed in Delaware, the company claimed that it held more than $500 million in both assets and debts, according to a recent report from Bloomberg Businessweek.

Public records did not reveal the full extent of the company’s debt problems, but sources did discover that one of the largest creditors was Cisco Systems, which claims that Trident owes it more than $4 million.

Trident, which is based in Sunnyvale, California reportedly blamed the economic recession for creating its financial troubles, as reduced consumer demand has dampened the market for the company’s circuit chips and computer software.

According to a local bankruptcy lawyer representing the company, in recent years, Trident “has experienced continuing operating losses which have resulted in declining cash over the past year.” Apparently, this trend has been heightened by increasing competition from Asian companies.

As more Asian competitors enter the computer software market, American businesses may find it increasingly difficult to lower their costs in order to stay afloat. In light of this reality, some experts predict that several other computer technology companies will also seek bankruptcy protection in 2012.

The news, however, is not all bad for Trident, which still holds valuable intellectual property as well as physical capital. Like many other large companies, Trident may find plenty of aid in bankruptcy court.

Sources indicate that Entropic Communications Inc., a company based in San Diego, has offered a bid to buy at least $55 million worth of assets from Trident at a bankruptcy auction.

After its purchase of these assets, Entropic says it plans to hire several hundred Trident employees to work at various firms across the world, including in countries like China, Taiwan, Ireland, Korea, and India.

So, while the future may be bleak for Trident as it was formerly known, many of the company’s employees may find a safe landing after their company leaves bankruptcy court.


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