Wednesday 24 May 2017

Alarm in Irish firm as US parent files for bankruptcy

The Chapter 11 legal process in the US operates much like examinership here, allowing
businesses to continue trading while debts are restructured (Stock picture)
The Chapter 11 legal process in the US operates much like examinership here, allowing businesses to continue trading while debts are restructured (Stock picture)
Donal O'Donovan

Donal O'Donovan

The US parent of a multinational that employs around 500 staff in Galway has filed for bankruptcy after struggling to reduce a $6bn (€5.6bn) debt.

The Avaya plant in Galway is not directly affected by the US insolvency process, which aims to slash debt and revive the business which provides technology to call-centre operators.

There is no indication that jobs here are under threat. The Irish arm of the business includes a global research and development facility in Galway.

The Chapter 11 legal process in the US operates much like examinership here, allowing businesses to continue trading while debts are restructured and to emerge out of insolvency intact, if the courts accept it is necessary to save the business.

The Irish and other international arms were outside the US restructuring process and would continue to trade as normal, the company said.

Avaya has been fighting to compete with cloud-based competitors after sales in the fourth quarter fell $50m (€46.9m) to $958m (€900m) from a year earlier.

Irish Independent

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