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General Magic Files for Chapter 11 Bankruptcy

Once a high-flying software company, General Magic Thursday said it has filed a voluntary petition for Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the Northern District of California, San Jose Division.

In September 2002, the Sunnyvale, Calif.-based company discontinued its operations and began the process of liquidating its business.

As a debtor in possession under Chapter 11, the company said it continues in the possession of its properties and management of its affairs. General Magic said the Chapter 11 case will allow the company to "continue marketing its assets and winding down its affairs by way of an orderly process to maximize return to creditors."

The company said it intends to pay creditors with the proceeds from the sale of its assets, but does not expect that there will be assets remaining for distribution to holders of its common or preferred stock.

Founded in 1990, General Magic started out with a groundbreaking operating system for PDAs that allowed handheld devices to send and receive e-mail and faxes and to talk with corporate networks.

The company then switched tack and offered a suite of voice infrastructure software products to large-scale companies to help create realistic voice access to new and existing Web-based enterprise applications. The company's product suite, known as magicTalk, was comprised of the Voice Gateway and the Enterprise Platform. In addition to its magicTalk product suite, General Magic offered supporting services, including product training, voice user interface design consulting, technical support and hosting. The company also offered its customers application development services, delivered directly or through professional services and consulting companies with which it partnered.

In late July, General Motors inked a deal with General Magic to use the company's J2EE-based voice application enterprise platform in OnStar's Virtual Advisor, which promises to give drivers location-based information such as weather and traffic.

General Magic had also developed products with AT&T , Motorola and Sony . These companies, along with Apple Computer , were core investors in the company.