December 2000, Vol. 17, No. 12 Speech Recognition Company In More Trouble: Lernout & Hauspie seeks appeal in Belgian court As reported previously in ISR (September 2000), speech recognition company Lernout & Hauspie (Ieper, Belguim and Burlington, Mass.; www.lhsl.com) (L&H) is under investigation by the Securities and Exchange Commission (SEC). The company also filed for and received Chapter 11 for reorganization protection under the U.S. bankruptcy code. Daniel Hart, General Counsel of L&H explained that, "an important factor in the decision to seek reorganization protection was the recent discovery of a very significant cash shortfall on the balance sheet of the Korean subsidiary, the circumstances of which we will vigorously investigate with the assistance of external resources." The chapter 11 filing, made in Wilmington, Delaware, will enable L&H to continue addressing its past problems, while developing a new strategic plan to leverage the company's base of technology assets and market access. A petition similar to Chapter 11, known as "concordaat," was filed for in a Belgian commercial court and denied on Dec. 8. The company plans to appeal the decision. John Duerden, president, chief executive officer and managing director said: "The board and I remain convinced that the best solution for the company is joint protection in the US and Belgium. We now have additional time to explain the current business plan to the court and to confirm the value of L&H's worldwide assets. We will consider every possibility that maximizes value for our shareholders and creditors. Negotiations are being finalized with a leading investment bank to assist us in this process." "In the meantime, the company continues to operate under the guidelines of Chapter 11 in the US and the December 12th decision of the Commercial Court of Ieper to appoint 3 administrators. On behalf of our shareholders and employees, we are committed to taking every possible action to ensure that L&H remains the leading global provider of speech and language technologies," Duerden continued. Jo Lernout, member of the Executive Committee of L&H, added: "I fully support John's business plan, and I am convinced that it represents the best way forward, not only for L&H's Belgian operations, but for the entire company." Table of Contents Web Site © Copyright 2000 by Lionheart Publishing, Inc. All rights reserved. Lionheart Publishing, Inc. 2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA Phone: 770-431-0867 | Fax: 770-432-6969 E-mail: lpi@lionhrtpub.com Web: www.lionheartpub.com