US firm KIT digital, a provider of video management software and services to some of the world’s biggest media brands, has reached agreement with three of its biggest shareholders to file for chapter 11 bankruptcy and subsequently reorganise the company under the new name of Piksel.
In a complex deal intended to turn the company’s recent troubles around, KIT digital will seek to be recapitalized by existing shareholders, and will regroup its core operating entities into a newly formed group called Piksel. It expects to pay all vendors, suppliers and other creditors.
The non-operating parent holding company (KIT digital) will file for chapter 11 bankruptcy by April 24th of this year, and plans to ring fence its profitable operating subsidiaries (including Ioko 365, Polymedia, Kewego, Multicast and Megahertz) to prevent them being impacted.
Peter Heiland, interim CEO of KIT digital, said: “The Plan provides certainty and comfort to our customers and employees and it will allow the reorganised company to aggressively pursue growth opportunities with confidence.
“By moving the core businesses forward together unburdened by the issues currently plaguing the corporate parent, our customers and products can once again become the sole focus of this exciting business.”
KIT digital has nearly 2,500 clients in over 50 countries across the world, and maintains headquarters in New York City.
Despite its strong market position, the company has fallen on hard times recently, and was forced to issue an apology to shareholders in November 2012 regarding significant accounting errors that invalidated a number of its previous financial statements.