L&H faces bankruptcy as court rejects rescue plan

Lernout & Hauspie (L&H) has come closer to insolvency last week after losing protection from its creditors in Belgium.

Lernout & Hauspie (L&H) has come closer to insolvency last week after losing protection from its creditors in Belgium.

The Belgian court of appeals rejected the company's second restructuring plan and lifted bankruptcy protection.

L&H faces liquidation on the day it was planning to sign a deal for the sale of part of its core speech and language technology business.

"We had received a binding offer and were planning to sign on 19 October," a company spokesman said. "We will now get around the table with the prospective buyer to avoid bankruptcy and to come to a transaction."

The US-based company, SpeechWorks International, paid $12.5m (£8.76m) for part of L&H, according to the Belgian daily newspaper, de Financieel Economische Tijd.

L&H, however, declined to confirm the name of the prospective buyer. SpeechWorks could not be reached for comment.

L&H had appealed against the conditions of the nine-month extension of the bankruptcy protection period that was granted by a Belgian court late last month.

The court set two major conditions when it extended the bankruptcy protection period for L&H. Transfer of core L&H activities had to guarantee long-term economical activity and substantial employment in Belgium, and at least 80% of the gross income from asset sales was to be reserved to pay off creditors. L&H at the time called the conditions "stringent".

L&H continues to operate under Chapter 11 bankruptcy protection in the US, but this protection does not extend to the company in Belgium.

The Belgian-US speech technology vendor went into a tailspin last year after a series of financial irregularities were uncovered. L&H filed for bankruptcy protection late last year.

Read more on IT jobs and recruitment

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.