As part of a restructuring announced in July, Redback Networks
has filed a Chapter 11 bankruptcy reorganization plan.
If approved, the document would erase $467 million in debt and reduce operating expenses by a third, officials with the San Jose, Calif., broadband networking systems, the company said.
Earlier, Redback tried to complete an out-of-court restructuring. Depsite winning support from “an overwhelming majority” of creditors and shareholders who voted, the company was unable to achieve a quorum.
A Redback spokesman was not immediately available for comment.
It’s unclear how long it will take to achieve court approval. The company said it secured a commitment for $25 million from an unnamed lender for “sales, marketing, product development and other expenses associated with business operations.”
Redback competes against the bigger Cisco Systems
and Juniper Networks
for the business of telecom carriers and service providers.
In its most recent quarter, the company posted increasing revenues compared to the previous quarter and the same period a year ago.