Invention Startup Quirky Files for Bankruptcy
September 22 2015 - 11:50AM
Dow Jones News
Startup invention company Quirky Inc., which specializes in
developing products to control household appliances with
smartphones and other devices, has filed for chapter 11 bankruptcy
to launch a sale.
The company filed for bankruptcy with a plan to sell its Wink
business—which holds its 60 household product and applications and
has partnerships with General Electric Co., Honeywell International
Inc. and others—to an affiliate of Flextronics International Ltd.
for $15 million, an offer that will be tested at auction.
Quirky is also searching for a buyer for the rest of its assets,
saying it hopes to preserve its online invention community but will
discontinue all of its business lines that can't be sold at
auction.
The company filed for bankruptcy a month ahead of the maturity
date of its $19.9 million revolver. It also faced $8 million in
deferred payments related to its acquisition of Undercurrent LLC
that would begin coming due in December. Undercurrent is a
consulting services provider that Quirky purchased last March.
Additionally, Quirky has a $9.3 million secured term loan and
$36.8 million in unsecured bond debt. Trade creditors are owed an
additional $28 million.
Quirky was founded as an invention platform in 2009 by Ben
Kaufman. Mr. Kaufman was replaced as CEO last month after Quirky
laid off 159 employees and as it became clear that the company's
efforts to sell its Wink business could only be executed in
bankruptcy. As of Tuesday, Quirky employed 90 people.
Write to Stephanie Gleason at stephanie.gleason@wsj.com
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(END) Dow Jones Newswires
September 22, 2015 12:35 ET (16:35 GMT)
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