January 15, 2003

MandrakeSoft in French Equivalent of Chapter 11

- By Robin 'Roblimo' Miller -
Despite the happy-talk statements made to NewsForge by Mandrake co-founder Gael Duval on January 14, it seems the company has gone, as our friends at The Register would put it, "tits up." Not only that, the filing was made on January 13, even though Mr. Duval told us on Jan 9 and Jan 10 that rumors that the company was bankrupt were just that: rumors.

Here's the full text of the MandrakeSoft statement found on the company's own site:

MandrakeSoft's financial reorganization 2003-01-15

The liabilities accumulated by MandrakeSoft through a series of quarterly losses have prompted the company to file for "declaration de cessation des paiements". The filing, similar to the U.S. Chapter 11-Reorganization, took place on January 13, 2003.

This reorganization of liabilities enables MandrakeSoft to continue its current operations, which are showing increases in revenue and significant decreases in expenses. MandrakeSoft's strategic partners are supporting the company in this process and the MandrakeSoft team is focused on continuing to deliver high quality services and products to its customers.

Following this filing and with the support of the court via a court-appointed Administrator, MandrakeSoft will be protected from its creditors, renegotiate its liabilities and prepare a continuation plan to be approved by the French Court in the coming months.

Version 9.0 of the product was a success both technically and commercially and the company is now focused on Version 9.1 which will be announced as scheduled in April.

Many companies emerge from Chapter 11 -- which is a "reorganization" that allows companies to duck or delay payment of debts instead of simply shutting down -- healthier than when they filed.

Perhaps MandrakeSoft will use this opportunity to put its operation on a sounder financial footing or become a non-profit or otherwise develop some sort of long-term financial plan beyond asking Mandrake users for donations whenever the company is low on cash.

As Mandrake users ourselves, we hope MandrakeSoft manages to get its financial house in order, one way or another. Or, if that doesn't happen, we sincerely hope someone else picks up Mandrake's (GPL) code and keeps working on it instead of letting the distribution die.

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