After an extraordinarily chequered career, local area network equipment manufacturer Corvus Systems Inc, San Jose has finally come close to the end of the road with a filing for protection from its creditors under Chapter XI of the US bankruptcy code. Corvus is optimistic that it will pull through, saying that the decision to file was strategically taken to conserve cash and continue the company’s business of offering entry-level products in the local area network market while an acceptable plan of reorganisation is being developed. While the new product base is strong, the weak cash position – despite that big contract with Amstrad Plc (CI No 950) – is such that the company cannot move forward without bankruptcy protection. Corvus expects to report a small profit for fiscal 1988 to May 31, but with a decline in sales for the fourth quarter. The company shows assets of $11.5m and liabilities of $9.6m, $3.6m of them secured. The 30 employees who are already on mandatory leave of absence will not now be recalled, and 24 other employees got their pink slips on Monday.
