Troubled US distributor CHS Electronics has filed for Chapter 11 bankruptcy protection and plans to resurface as an internet incubator.
The move follows a turbulent six months during which time the company lost its UK subsidiaries and was implicated in a number of legal actions.
CHS proposes to give its creditors equity in Europa IT, a Danish company set up by former CHS chief operating officer Mark Keough.
Creditors representing $275m in claims have already approved the plan which includes Europa IT buying CHS's remaining European subsidiaries. This will free the distributor of its obligation to creditors.
The agreement, which the companies hope will be approved by August, assumes that claims will not exceed $500m. CHS's creditors will receive $65.7m of Europa IT securities, including 25 per cent of the reorganised company. CHS itself will receive five per cent of Europa IT's common stock.
Claudio Osorio, chairman and chief executive of CHS, said the filing "creates an orderly process for our creditors and allows for the sale of CHS's assets for maximum value for creditors".
"The reorganised CHS will emerge as an incubator and holding company for internet companies engaged in business-to-business electronic exchanges, primarily in the IT industry," he added.
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