As it had warned it might, troubled storage company SyQuest Technology Inc has filed for Chapter 11 bankruptcy protection in a court in Oakland, California. But as it seeks protection from its creditors, the company says it has found a buyer for its substantial assets, although no names or descriptions were divulged. Amid a tough competitive landscape in the market for removable cartridge hard drives, the company has been losing money steadily for the past three years and in August announced it would be cutting staff by about 50%. Pursuant to a letter of intent signed by both parties, the mystery buyer will acquire SyQuest’s patents and other intellectual property, manufacturing and development equipment, finished goods, work in process and raw material inventory for disk drives and cartridges. SyQuest, meanwhile, will retain all of its accounts receivable and ownership of its building in Penang, Malaysia. The company says it will allocate a portion of the purchase price to provide warranty service for products already sold into the channel or to end users, while the buyer would be responsible for providing customer support and warranty service for all SyQuest products it sells in the future. The letter of intent is subject to both parties entering into definitive agreements no later than November 25.
