Pinnacle Micro Files for Protection

Pinnacle Micro Inc., the long-troubled Orange County maker of optical storage devices, said Friday that it has filed for bankruptcy protection to help ease plans to sell its assets to a Newport Beach firm.

The company, which avoided being forced into bankruptcy three years ago, said the move will protect it from creditors while it prepares to sell its inventory and other assets to Sigma Global Interactive Corp.

Pinnacle, based in Rancho Santa Margarita, filed court documents Thursday in U.S. Bankruptcy Court in Santa Ana.

“We hope to have a sale approved by the Bankruptcy Court and consummated within 60 days of the filing,” said Pinnacle lawyer Robert W. Pitts, a partner at bankruptcy law firm Winthrop Couchot in Newport Beach.

A spokesman for Sigma Global said the company is essentially a group of investors who want to try to turn things around at Pinnacle.

Pinnacle Micro had been forced by three creditors into an involuntary bankruptcy in August 1998. The court dismissed the petition two months later, after the creditors declined to post a bond and meet other requirements for a hearing, the company said at the time.

Pinnacle Micro then started working privately on a reorganization plan that would pay back its $22.4 million in debts. The plan developed into the proposed sale of the company’s assets, which mostly consist of unsold inventory.

Company officials could not be reached for comment late Friday.