Lernout & Hauspie Files for Chapter 11

Lernout & Hauspie (LHSPE), once the toast of Europe’s high-tech sector and the pride of its Belgian home town, has fallen from grace with a nasty bump.

The software firm that started life nestled in farmland and went on to take Wall Street by storm--capturing investors’ imagination with its voice recognition technology that could motor computers--filed for Chapter 11 bankruptcy protection Wednesday after legal and financial wrangles brought it to its knees.

In documents filed in U.S. Bankruptcy Court in Wilmington, Del., Lernout reported $2.37 billion in assets and $489.6 million in debts. The Belgian software maker, which borrowed $450 million to buy U.S. rival Dictaphone earlier in the year, said recently that “errors and irregularities” will make it necessary to restate financial results for 2 1/2 years.

The company couldn’t immediately be contacted for comment.

Shares of Lernout, which hit $65 back in March, last traded at $6.22 before trading was halted Nov. 8.