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Chapter 7 filed by data center services company

A data center services provider has filed for bankruptcy after several attempts to refinance their venture, according to local business source. South Carolina residents familiar with information technology may be aware of GlassHouse Technologies, a company venture-backed since 2001. Citing overwhelming debt, GlassHouse closed their doors and filed for Chapter 7 as of June 18.

According to the bankruptcy paperwork, GlassHouse lists only $1 million in assets against a staggering $50 million to $100 million of debt. The company has predominantly relied upon venture funding since its inception in 2001, having raised close to $100 million in funding in that time. Investors include a number of high-profile venture capitalists including Kodiak Venture Partners and GrandBanks Capital.

The trouble started back in 2009 when it withdrew a 2007 filing for a $100 million IPO. Things continued to backslide in 2011 when existing plans for a $75 million IPO were similarly withdrawn. It is hoped that liquidating the company's existing assets will help protect the company's management from financial instability while helping to satisfy creditors to the extent possible. The financial strife is not limited to GlassHouse in America, however, as a British subsidiary is also facing mounting debt problems. Hopefully this move will take some of the pressure off the international partner.

Chapter 7 bankruptcy is designed to allow asset liquidation that can help protect the personal finances of business owners, as South Carolina residents are well aware. When assets are liquidated, the cash value is applied to outstanding debt. With luck, this can help business owners get back on their feet and move forward from a more positive financial footing.

Source: bostonherald.com, "Broken GlassHouse files for Chapter 7 bankruptcy", Donna Goodison, June 18, 2014

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