NAS vendor Auspex Systems Inc. (Nasdaq: ASPX) late Tuesday announced that it has filed for Chapter 11 liquidation with the U.S. Bankruptcy Court for the Northern District of California in San Jose.
The Santa Clara, Calif., company said it has laid off all but about 27 employees. At last count, in 2002, the company had a headcount of 233. In a statement, Auspex said most of the remaining employees will provide "ongoing customer support operations."
Meanwhile, a smaller group of employees will try to sell "substantially all of the assets" of the company, which include Auspex's NAS operating system and applications. It's not clear who -- if anyone -- would be interested in bidding for this intellectual property, but if recent history is any indication, Auspex probably wouldn't get very much for it. Last November, Adaptec Inc. (Nasdaq: ADPT) paid around $2 million for Tricord Systems, another bankrupt NAS company (see Adaptec Scrapes Up Tricord).
The news of Auspex's bankruptcy filing doesn't come as a surprise. The company reported sales of $5.3 million and a net loss of $6.8 million for its second fiscal quarter of 2003, ended December 31, 2002. When it released its financial results in February, the company strongly hinted that it may file for bankruptcy, saying "there is still doubt that the company's existing cash, cash equivalents, and short term investments will be sufficient" to keep it afloat (see Auspex Runs Low on Cash).
Auspex was founded in 1987, and preceded Network Appliance Inc. (Nasdaq: NTAP) and others to market with network-attached storage appliances. The company's demise is further evidence that being a pioneer in a category doesn't always pay off.