Management at battered speech technology developer Lernout & Hauspie Speech Products NV said today the company is not going to splinter.
"We are going to focus on preserving what we have, not on spinning it off," said Roel Pieper, chairman of the board at L&H, in a conference call with analysts and reporters. Pieper asked for "restraint" on speculation that the company's next step would be selling off parts in order to satisfy its creditors.
This week L&H filed for Chapter 11 bankruptcy in the U.S. and filed for bankruptcy under Belgian law in its hometown of Ieper, Belgium. It is under investigation by the U.S. Securities and Exchange Commission for alleged improper business practices in relation to Asian subsidiaries and says $100 million is missing from the coffers of its South Korean unit.
"The strategy is to identify high-priority areas in the business and galvanize the company resources behind that," said company CEO John Duerden.
L&H still is very much in heavy weather. "By no means are we in a safe haven, but at least we can see a haven," said Pieper. "We have a number of critical steps to go through."
One of those steps is getting short-term financing. Duerden declined to say how much cash L&H needs to stay afloat. "We are in active negotiations with creditors and I am confident we will arrive at a satisfactory solution," Duerden said.
"Events are unfolding at electrifying speed," said Duerden. "The filing for bankruptcy is to create some breathing space, to ensure the company is not hindered by creditors."
Duerden has set four objectives. The chief executive wants "to get the past behind," have reliable financial statements filed, retain employees and customers and make a solid restructuring plan that "can keep the company together."
Business has been slowing down across the board for L&H, Duerden said in answer to questions by reporters. In an effort to retain business, customers have been contacted to ensure them the company is running, Duerden said.
Pieper and Duerden both said they were unpleasantly surprised by the company's troubles. "I was absolutely not aware of the scale and magnitude of the problems we are now facing," said Duerden. "This company is facing a serious crisis."
Both executives stressed the complexity of the issues L&H is facing. "We are charting new courses," Pieper said, adding that L&H is battling judicial differences, cultural problems and human resources issues.