Syntax-Brillian Corp (MM) (NASDAQ:BRLC)
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Syntax-Brillian Corporation (Nasdaq: BRLC), a leading manufacturer and
marketer of LCD HDTVs, digital cameras and consumer electronics
products, today announced that, pending court approval, it has entered
into an asset purchase agreement to sell certain of its assets to a
newly-created company, Olevia International Group, LLC, which is under
common ownership with TCV Group. TCV Group is one of Syntax-Brillian's
original partners for industrial and mechanical design and it provides
the plastic injection molded parts for the Olevia branded
high-definition widescreen LCD televisions. Under the terms of the
transaction, in exchange for the purchased assets, Olevia International
Group has agreed to assume $60.0 million of Syntax-Brillian's secured
debt.
Concurrent with this announcement, Syntax-Brillian filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of Delaware.
The Company filed a motion pursuant to Section 363(f) of the Bankruptcy
Code to seek Bankruptcy Court approval for the sale. The proposed sale
is subject to higher and better offers, bankruptcy court approval and
other conditions customary in a transaction of this type. The Company
anticipates closing this transaction by August 31, 2008.
"Following a careful review of all of our alternatives,
Syntax-Brillian’s management and Board of
Directors – working in close consultation with
outside legal and financial advisors –
unanimously determined that a sale, expedited through the Chapter 11
process, represents the best long-term solution for our retail partners,
suppliers, employees and consumers,” said
Gregory F. Rayburn, Interim Chief Executive Officer at Syntax-Brillian. “This
process will allow us to operate business as usual, even as we address
liquidity and leverage issues experienced in the past year. It will
allow us to honor our commitments to our retail partners, suppliers,
employees and consumers, continue to advance initiatives that improve
and develop our product lines, and better position us to capitalize on
the demand for our products going forward.”
“We believe the proposed transaction would
enable us to stabilize our business and execute on our growth prospects,”
Mr. Rayburn continued. “Moreover, we believe
the purchaser would gain a competitive advantage by being the first in
the LCD TV industry to unite design, sourcing, manufacturing and
delivery of HDTV products under common ownership.”
The Chapter 11 filing includes all of Syntax-Brillian’s
subsidiaries with the exception of Vivitar, the Company’s
brand of digital still and video cameras. Syntax-Brillian has initiated
a process for the sale of Vivitar, which will occur separately from the
Chapter 11 filing announced today. In the interim, Vivitar continues to
conduct business as usual.
Syntax-Brillian intends to continue normal business operations at all of
its facilities, consistent with its obligations as a Chapter 11
debtor-in-possession (DIP) under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy
Code. The Company is currently in negotiations with lenders to secure
DIP financing, which will provide the working capital and financial
resources necessary to fund the transition to new ownership.
The Company is seeking, and expects to receive, approval for a variety
of first day motions, including requests to make wage and salary
payments, honor existing employee benefits, continue certain customer
programs and pay suppliers for goods and services delivered after July
8, 2008.
NASDAQ Delisting Expected
The Company also announced today that on July 1, 2008, it received a
letter from the Nasdaq Stock Market notifying the Company that for the
last 30 consecutive trading days its common stock has closed below the
minimum $1.00 per share requirement for continued inclusion under
marketplace rule 4450(a)(5). Syntax-Brillian has been provided 180
calendar days, or until December 29, 2008, to regain compliance.
Due to filing a voluntary petition for relief under chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court, the
Company does not intend to attempt to regain compliance with this
marketplace rule and expects that its common stock will be delisted from
the Nasdaq Global Market within the next 10 days.
Syntax-Brillian expects that shares of its common stock will have no
value as a result of the reorganization and subsequent transaction.
Management and Board Changes
The Company also announced today the resignation of several directors.
Effective June 30, 2008, Vincent F. Sollitto, Jr, James Ching Hua Li,
Bruce Berkoff, David Chavoustie, Yasushi Chikagami, and Max Fang,
resigned as directors of the Company. Following these resignations,
Michael Garnreiter constitutes the sole member of the Board of
Directors. Furthermore, on July 2, 2008, the Board of Directors
terminated James Ching Hua Li as President and Chief Executive Officer.
Gregory F. Rayburn remains Interim Chief Executive Officer of the
Company.
About TCV Group:
TCV Group is one of Syntax-Brillian’s
original partners for industrial and mechanical design and provides
plastic injection molded parts for Olevia branded high-definition
widescreen LCD televisions. It is currently one of the OEM/ODM partners
for Syntax-Brillian, manufacturing LCD televisions using its own
vertical integrated facilities within TCV Group and its strategic
partners in the LCD TV industry.
About Syntax-Brillian:
Syntax-Brillian Corporation (www.syntaxbrillian.com)
is one of the world's leading manufacturers and marketers of LCD HDTVs,
digital cameras, and consumer electronics products. The Company's lead
products include its Olevia(TM) brand (www.Olevia.com)
high-definition widescreen LCD televisions -- one of the fastest growing
global TV brands -- and Vivitar brand (www.vivitar.com)
digital still and video cameras. Syntax-Brillian has built an Asian
supply chain coupled with an international manufacturing and
distribution network to support worldwide retail sales channels and
position the Company as a market leader in consumer digital
entertainment products.
Forward-looking Statements:
Certain statements contained in this press release may be deemed to be
forward-looking statements under federal securities laws, and
Syntax-Brillian intends that such forward-looking statements be subject
to the safe harbor created thereby. Syntax-Brillian cautions that these
statements are qualified by important factors that could cause actual
results to differ materially from those reflected by the forward-looking
statements contained herein. Such factors include changes in markets for
the Company's products; changes in the market for customers' products;
the failure of the Company's products to deliver commercially acceptable
performance; the ability of the Company's management, individually or
collectively, to guide the Company in a successful manner; and other
risks detailed in Syntax-Brillian's Annual Report on Form 10-K for the
fiscal year ended June 30, 2007 and subsequent filings with the
Securities and Exchange Commission.
Brillian and Vivitar are trademarks or registered trademarks of
Syntax-Brillian Corporation. All other trademarks are the property of
their respective owners.