Jan 4 (Reuters) - Chipmaker Trident Microsystems Inc filed for bankruptcy protection on Wednesday and said Entropic Communications Inc had been appointed as the “stalking horse” bidder.
Entropic, which designs chips for video applications, will buy Trident’s set-top box business, patents and other intellectual property for $55 million and will assume some liabilities of the company.
A “stalking horse” is a bidder chosen by a bankrupt company from a pool of potential suitors to make the first bid for its assets.
Trident, which makes chips for digital TVs and LCDs, has been posting losses for fourteen straight quarters because of increased competition and slowing demand in the sector.
“Trident, like many of its competitors, has been undergoing rapid changes which have hindered its ability to operate profitably,” said Dr. Bami Bastani, chief executive officer of Trident.
Entropic said it plans to hire 385 Trident employees located primarily in China, India, Taiwan and will also acquire facilities in Texas, Northern Ireland and India.
Trident also entered into a license agreement with RDA Technologies Ltd for its SX-5 SOC product for the television market and said it had enough cash balance to meet customer and vendor requirements.
The company, which filed for bankruptcy protection along with its Cayman Islands subsidiary, said none of its other subsidiaries were subject to the bankruptcy procedure and would continue to operate normally.
As of Oct 31, Trident had total assets of $309.9 million and liabilities of $39.6 million, according to court documents.
Entropic will need approval from the court regarding its agreement as the “stalking horse” bidder and other agreements it has entered into with the company.
The case is In re: Trident Microsystems Inc, U.S. Bankruptcy Court, District of Delaware, No. 12-10069.