With a federal judge having approved its corporate reorganization plan, Silicon Graphics (SGI) is set to emerge from Chapter 11 bankruptcy protection next month.
U.S. Bankruptcy Judge Burton Lifland for the Southern District of New York ruled that all the necessary requirements were met for SGI to implement its reorganization strategy. Creditors voted in favor of the plan.
“As we emerge, the recapitalization of the company will be complete. We have eliminated the legacy debt, improved our liquidity and stabilized the business. We have also taken out significant costs — $150 million on an annualized basis. We have re-engineered the company and have a strong leadership team that will be executing this plan,” said Dennis P. McKenna, SGI’s CEO and chairman.
McKenna, who joined the company in January, has engineered the company’s restructuring. He eliminated older products, laid off 12 percent of the company’s employees and followed with the bankruptcy petition in May.
Most of SGI’s current products have been introduced in the past nine months. They have shifted focus away from familiar SGI visualization products to newer markets that include managing corporate data and large memory capacity servers.
“Visualization...is an insignificant portion of our business today,” McKenna told News.com. “Our legal name is Silicon Graphics. But our branding and messaging will all be around SGI.”