Television maker Syntax-Brillian (BRLC) filed for Chapter 11 bankruptcy yesterday, and the restructuring process should leave the equity holders with only worthless shares. This all but ends a saga I’ve followed for almost a year, and is an unfortunate but fitting end to a company that had much promise but could never seem to deliver on the expectations. The last few months were plagued by executive roulette, and is hardly surprising given the languishing stock price and lack of up-to-date financials. It probably also explains why Investor Relations never answered any of my emails – turns out that only eight employees remain with the company.
This comes nine months after my interview with then-CEO Vince Sollitto (see link above), and it seems that – like Jim Chanos suggested recently - that insiders have a very good idea as to the basis for high levels of short activity in their stocks. Sometimes, however, they aren’t speaking in the hypothetical. While I’ll wait a bit longer to see what kind of disclosures, if any, filter out from the bankruptcy proceedings, BRLC’s imminent delisting suggests that interest in this company not involving a lawsuit is likely to dwindle.
One sadly ironic note in the press release was Interim CEO Greg Rayburn explaining how this move would best enable the company to best honor its commitments to a number of parties – shareholders, of course, not being one of those. As a kind of lasting insult, however, there won’t really be any assets leftover at Syntax-Brillian for shareholders to go after, should a lawsuit against the company proceed. The most interesting tidbit I’ve found so far is that the company had assets of $175 million at the beginning of June this year – a stark decline from the $550 million in total assets reported in the last SEC filing for the period ending September 2007. While reported assets are down 70%, liabilities were up 14%; not a huge amount, but it makes me wonder how approximately $375 million in assets is vaporized without a word said in between. Where were the auditors on this?
Samuel Sanmina, the pen name of a noted and vocal short seller of BRLC, shares some last thoughts on the company here.
