Lernout & Hauspie Speech Product's (L&H) "restructuring and recovery plan" was yesterday rejected by Belgium's commercial court.
The company was ordered to come up with a new plan, according to reports.
The judge chastised the plan, saying it lacks clarity and is based on wishful thinking. He extended the bankruptcy protection period to September 30, and ordered L&H to draft and file a new plan by September 10, the reports said.
Crisis plan L&H filed the restructuring and recovery plan, which suggests either the complete sale of all L&H assets, or the preservation of just its core business, a month ago. In early June, a vast majority of the company's creditors approved the plan drafted by its crisis management.
L&H has been trying to sell its translation unit Mendez for months. However, Credit Suisse First Boston has been unable to find a buyer. In the US, L&H will try to sell, among other assets, dictation and call-centre company Dictaphone, which it acquired for about $510 million in March last year.
The new restructuring plan ordered by the court Wednesday should include an overview of L&H's current financial situation and forecasts for payments to creditors based on realistic proceeds from the sale of assets, the judge said. Additionally, the judge wants a clear picture of L&H's operational and restructuring costs.
Fraud charges The news comes after L&H's CEO, Gaston Bastiaens' fall from grace on Saturday, May 26. He was arrested in a Boston suburb and charged with financial fraud and stock manipulation. Bastiaens faces proceedings to extradite him to Belgium. How long this will take is uncertain.
Bastiaens' arrest follows that of five other colleagues, including founders Jo Lernout and Pol Hauspie, and former managing director Nico Wallaer. They all face fraud charges. Nobody at L&H was available for comment.