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Company withdraws 2 IPOs before filing Chapter 7 bankruptcy

The economy makes a difference in decisions for many businesses. For some businesses in Texas and elsewhere, making certain business moves is dependent upon strong economic conditions. One technology company found this out to be the case when it decided to reverse its decision to move forward with two separate initial public offering efforts. Now, the company, GlassHouse Technologies, has decided to file a Chapter 7 bankruptcy.

The technology firm specializes in providing data center services and is primarily backed by venture capitalist investment. The company had originally intended to move forward with an initial public offering of $75 million in stock shares in 2011. However, GlassHouse decided against this due to uncertainty within the economy. This was the second time the company withdrew an initial public offering; the company withdrew a $100 million initial public offering in 2009.

The recently filed bankruptcy petition reports that the company has assets worth less than $1 million. The company reported debts totaling anywhere between $50 million and $100 million. GlassHouse was initially formed in 2001 and has been successful in obtaining at least $91.3 million worth of venture capital funding since the company’s formation. A foreign subsidiary of the company had also faced financial challenges related to unpaid taxes prior to the recent bankruptcy filing.

The Chapter 7 bankruptcy filing will liquidate all of the company’s assets, and the business entity will no longer exist. However, the owners of the company will then be free to move on to their next business ventures. This type of debt relief is also available to individuals as well as businesses in Texas and other states. A personal bankruptcy will operate similarly, in that non-exempt assets will be liquidated in order to repay creditors while unsecured debts will be discharged.

Source: Boston Herald, "Broken GlassHouse files for Chapter 7 bankruptcy", Donna Goodison, June 18, 2014

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