Vitech America Inc., Miami, FL, filed Friday for chapter 11 bankruptcy protection.
The U.S.-based Brazilian computer maker is a provider of PC-based information technology services direct to business and individual customers. The company filed its petition with the U.S. Bankruptcy Court for the Southern District of Florida, according to news reports.
Vitech expects to continue operations while it uses the reorganization process to protect itself from a judgment given to Gateway in a New York case against Vitech while allowing Vitech to proceed with its Florida case against Gateway.
The goal will be for Vitech to have adequate relief from Gateway and other creditors to regain the financial strength it requires to continue to compete effectively. The company is also evaluating the possibility of a sale, the reports said.
The company is seeking permission from the courts to continue to pay employees and said it intends to pay vendors on a timely basis for goods and services delivered after the filing date.
The Company’s Brazilian operating subsidiary, Microtec, was not part of the filing.
On March 9, 2001, Vitech America filed a lawsuit against Gateway in the United States District Court for the Southern District of Florida for fraud, negligent misrepresentation and breach of contract. The company believes that Gateway fraudulently induced it to enter into the September 1999 convertible loan agreement and that Gateway has been in breach of the contractual obligations causing material damages to Vitech, according to reports.
Gateway responded to the lawsuit in Miami with a separate lawsuit filed in New York claiming that Vitech is in default on $41 million of the loans made to the company and is seeking repayment under the promissory notes issued pursuant to the loans.
The litigation is ongoing.
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