Pinnacle Micro Files Bankruptcy Petition to Ease Sale
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 had avoided being forced into bankruptcy three years ago, said the move will protect it from creditors while it prepares to sell inventory and other assets to Sigma Global Interactive Corp.
Pinnacle, based in Rancho Santa Margarita, filed documents in U.S. Bankruptcy Court in Santa Ana on Thursday.
“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. The spokesman declined to comment further.
Pinnacle Micro had been forced by three creditors into an involuntary bankruptcy in August 1998. The creditors, which were owed a total of about $210,000, tried to force the company into liquidation.
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 then started working privately on a reorganization plan that would pay its $22.4 million debt. The plan developed into the proposed sale of company assets, which consist mostly of inventory.
Founded in 1987, Pinnacle Micro develops optical storage technology and manufactures recordable compact disk systems for data storage. Analysts traced the company’s decline to its 1995 decision to switch from reselling other manufacturers’ products to making its own.
At its peak in the early 1990s, Pinnacle Micro employed about 210 people, most in its headquarters, then in Irvine, Pitts said. Pinnacle Micro has since laid off all but 11 employees.
Company officials could not be reached for comment late Friday.
