Struggling holography firm Voxel pushed into Chapter 7 bankruptcy

Bankruptcy trustee hopes to find buyer for assets

A California bankruptcy trustee is looking for buyers for the assets of holography developer Voxel after the Laguna Hills, CA, company's Chapter 11 bankruptcy filing was converted into a Chapter 7 filing. Although Chapter 7 filings typically involve the liquidation of a company's assets, the trustee in the case hopes to keep Voxel running and to sell it as an operating company.

Voxel arrived at its predicament as a result of the company's dispute with former manufacturing partner General Scanning of Watertown, MA. Voxel had accused GSI of manufacturing Voxcam holography systems that were below specifications, while GSI claimed that it was owed money for its engineering work on the products. The dispute crippled Voxel's efforts to bring the systems to market.

Voxel lost the dispute in May, with arbitrators awarding GSI $1.9 million. Because Voxel had little cash on hand to pay the award, the company sought Chapter 11 bankruptcy protection from creditors (SCAN 6/10/98). The company slashed its work force in an effort to cut costs as it sought new financial backing.

The company apparently was unsuccessful in securing operating funds, however, and a judge hearing the case in the U.S. Bankruptcy Court for the Central District of California converted the case to a Chapter 7 filing. The case has been assigned to Thomas Casey, a bankruptcy court trustee, for disposition of the company's assets.

Voxel has about $2.3 million in unsecured debt to creditors, consisting of the General Scanning award and an additional $400,000 in debt, according to Casey. Although the trustee could hold an auction to sell off the firm's assets on a piecemeal basis, Casey believes that Voxel is more valuable as an operating company.

Voxel holds patents on its technology for producing holograms from CT and MRI scans, and still employs five key executives crucial to the company's operations. Voxel's technology could be useful to a medical imaging vendor interested in offering Voxcam systems for applications such as surgical planning.

"I will be aggressively marketing the intellectual property of Voxel to realize a higher value for the company and its intellectual property as a going concern, rather than selling off the company's assets," Casey said.

Casey has already received several interested inquiries about Voxel, but would like to solicit offers from as broad a spectrum of medical imaging vendors as possible. For more information, interested parties should call 714/653-8373.