Vidikron Funding Confirmed
Vidikron of America, Inc. has now announced that it has obtained a credit line to replace its obligation to PNC Bank. As previously announced, Vidikron reported that PNC Bank had exercised its right of setoff against the funds in accounts maintained at the Bank. Vidikron says that with its new funding in place, the Company is now in a position to satisfy its obligations and continue its operations.
As of the last week in July, it looked like the future of Vidikron Technologies Group (VTG) was in serious doubt. Financial woes led to the resignations of top executives, and Vidikron's banker withdrew support.
Early reports of difficulties at the company alluded to a possible filing for reorganization under Chapter 11 of US bankruptcy law, which gives struggling companies breathing room and an opportunity to find other forms of financing. Apparently, those efforts failed. On July 28, the technology-heavy NASDAQ exchange ordered a halt to all trading in VTG stock, and PNC Bank froze Vidikron's assets. PNC notified the company's customers to make all payments directly to the bank.
Vidikron was then reportedly looking at a Chapter 7 bankruptcy: total liquidation of all assets in an attempt to satisfy outstanding debt. Chapter 7 first addresses secured debt (such as a direct bank loan), and only secondarily addresses unsecured debt, such as money owed to suppliers. In Chapter 7 liquidations, "accounts payable" typically receive only a fraction of what they are owed. Without a financial savior, the company was facing almost certain bankruptcy.
The downfall of Vidikron would leave a major hole in the high-end projector market. Over the past decade, the manufacturer has earned a reputation for building some of the best video projectors on the market, notable for their sleek, Ferrari-inspired styling and unexcelled picture quality. Despite this success, the year-old Vidikron Technologies Group, formed last year by the merger of Italy's Vidikron and US-based Projectavision, has had a brief, rocky history. VTG's intractable money problems led to the July 29 resignations of President Flavio Peralda, COO Emilio Baj Macario, and Vice President Giovanni Cozzi.
Despite the difficulties, Vidikron has continued to make and ship products—including the Kronos, its much-anticipated HDTV projector, which begins shipping to dealers this week. Last week, a rumor surfaced that an "angel" investor has offered to pay off the company's debt and get it back on track. We will keep this story updated as events unfold.