IP telephony vendor Zultys Technologies has numerous creditors and is more than $45m in debt after filing for Chapter 11 bankruptcy, CRN has learned.
CRN exclusively revealed last week that Zultys had filed for a Chapter 11 with the US Bankruptcy Court in the Northern District of California (CRN Online, 18 September).
The Chapter 11 report has since been leaked to CRN and shows that Zultys is more than $45m in debt with between 200 and 999 creditors, including distributors Avnet Electronics Marketing, Bell Microproducts and Arrow Electronics.
Iain Milnes, founder of Zultys, told CRN: “The Chapter 11 process means our debts are eliminated. The people we owe money to will lose out, but we will look to compensate them so that we can work with them in the future.
“Chapter 11 is a misconceived concept in Europe. It is a bump in the road, but it offers us a vehicle for reorganising company affairs.”
Milnes added that the Chapter 11 will allow Zultys to continue trading without legal action being brought against the company.
“Our sales are progressing,” he said. “There is some hesitance in the market, but we still have the best products out there. Our channel is by and large loyal, but maybe 10 to 15 per cent have not been.”
Scott Dobson, managing director of distributor Vcomm, said: “The UK has been the only market that has been performing for Zultys. It is a shame because Zultys’ technology was one of the best in the market.”
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