Silicon Graphics Inc. has filed for bankruptcy protection under Chapter 11 on May 8, 2006, after a round of restructuring measures failed, and signed an agreement with its lenders to reduce the companys debt by about $250 million, according to SGI officials.
In court papers, SGI said it had been challenged by delays in introducing new technology, a focus on more specialized markets and more intense competition from larger rivals.
In January, the Mountain View, California-based company named board member Dennis McKenna as chairman/ceo, replacing 20-year SGI vet Robert Bishop. McKenna has cut spending, but also struggled to cope with disappointing sales.
SGI plans to file its reorganization plan soon and hopes to emerge from bankruptcy within six months.
SGIs non-U.S. subsidiaries in Europe, Canada, Mexico, South America and Asia Pacific were not included in the filing.
We want to assure our customers, our employees and our communities that SGI is operating-business as usual, said McKenna.
SGI is best known for its high-powered computers that are used in creating cinematic visual effects. The machines are also used for pharmaceutical research, petroleum exploration, simulators as well as the defense and financial industries.
A recent defense contract was for SGI Altix server and SGI InfiniteStorage solutions to provide quantitative predictions of the vulnerability and survivability of targets for existing and prospective Navy warheads.
Jim Clark founded SGI and then went on to found Netscape Communications Corp., the web-browser developer.
SGI named AlixPartners Llc. as its restructuring advisor and Bear Stearns & Co. as its financial adviser for the Chapter 11 case.