SSD maker OCZ declares bankruptcy, may sell assets to Toshiba

SSD maker OCZ declares bankruptcy, may sell assets to Toshiba

SSD hard drive maker OCZ has announced bankruptcy after financial backer Hercules sent official notices announcing that it has taken exclusive control of the company’s depository accounts effective from November 25. The company, on hook for a loan it took from the finance company, seems unable to pay the same at this point. Adding to earlier reports about the struggling company dealing with several shareholder lawsuits questioning their accounting practices, it seems like OCZ had little choice but to declare bankruptcy. While the hardware maker reportedly had a market value of $43 million earlier this month, its stock has since fallen by 75 percent, leaving it with a capitalisation of only $11 million. Since Hercules’ take over of the company’s assets, OCZ has little choice left but to facilitate sales of its properties to another company. That company will most likely be Toshiba, which seems to have plans to re-ignite its effort in the flash storage market. The latter, currently a primary NAND manufacturer, can take advantage of its existing properties to achieve profit margins on retail SDDs that OCZ could not match.

SSD maker OCZ files for bankruptcy

OCZ is known for being one of the first companies to really cut the price on consumer-level SSDs, partly by offering them in small and affordable sizes, like 32GB and 64GB. Its track record, however, was plagued by reports of hit-and-miss quality control and poor customer service. There have also been reports of OCZ hitting a storage of NAND flash memory storage chips for the last year, and has not had a full-year profit in over five years. The sale to Toshiba is subject to a number of factors, though, including employee retention. The company will file its official bankruptcy after completing the asset purchase agreement with Toshiba and Hercules. There is a ways to go before the deal is complete, though. A bankruptcy court has to accept Toshiba’s offer as the best deal for Hercules and any other creditors. If the deal falls apart, the company will immediately file for bankruptcy and liquidate. Other major players in the industry like Seagate, WD and Micron have also been rumoured to be acquirers for the struggling SSD marker, but for now, it seems like Toshiba has managed to beat them to the chase.

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