Becoming the most prominent casualty so far of the personal computer price wars, Everex Systems Inc announced just after we closed on Monday that it was filing for Chapter 11 bankruptcy protection from its creditors. We determined that taking this step was necessary to facilitate the process of financing the on-going business, chief executive Jack Kenney said. The Fremont, California personal computer manufacturer had toyed with acquiring one of the cheap-and-cheerful mass market companies and got as far as publishing the banns with Northgate Computer Corp before the engagement was broken off, and it also thought that a move up-market into servers might improve the picture, but it says that it has experienced continued difficulty in finding cash to support the sale of products and satisfy creditors. It has been paying down its credit line and has operated under constrained lending circumstances since October. A trade creditors committee has been working with the company and continues to support efforts to date, Everex claims. Co-founder Steve Hui resigned last week (CI No 2,077) and Everex appointed another co-founder, John Lee as chairman. Lee has served on the board as executive vice-president. With overcapacity in the personal computer business it is hard to see a happy outcome from a Chapter 11 filing even for a $500m-a-year company like Everex.
