SUNNYVALE, CALIF.: Silicon Graphics, once a powerhouse of graphics hardware, has filed for bankruptcy according to several reports. The company filed for Chapter 11 in U.S. Bankruptcy Court in Manhattan yesterday. It soon after agreed to be acquired for $25 million by Rackable Systems, a server and storage concern in Fremont, Calif.
During the 1990s, Silicon Graphic systems were tapped for several major Hollywood productions--“Star Wars,” “Terminator 2,” and “Jurassic Park.” As graphics software grew more sophisticated, SGIC focused on servers and data storage. It first filed for Chapter 11 in May of 2006, emerging that same year in October.
Silicon Graphics (NASDAQ: SGIC) finished 2008 with a loss of $153 million on revenues of $354 million. It listed assets of $390.5 million and debt totaling $526.5 million in the bankruptcy filing, according to Reuters. Its creditors include Voltaire Inc, Intel Americas and Qimonda.
Shares of Rackable Systems (NASDAQ: RACK) initially fell on the news, from more than $4 Tuesday to around $3.60 Wednesday, before making a complete recovery today. Rackable employs around 300 people, according to the Silicon Valley Mercury News. SGIC has around 1,170 employees. Its acquisition of SGIC is pending approval of the bankruptcy court. -- Deborah D. McAdams
