April 27, 2001 5:50 PM PDT
Quokka seeks refuge in bankruptcy court
The federal bankruptcy court in San Francisco received the filing late Friday, but it was not immediately released to the public. As a result, the company's assets and liabilities could not be determined.
The case will be handled by U.S. District Judge Thomas E. Carlson. A hearing is scheduled for August 22, according to a court official.
Paul Startz, general counsel for the online provider of sports information, refused to comment Friday on the filing.
As previously reported, Quokka executives were considering a bankruptcy filing if they could not locate a buyer or partner. According to sources, the last hope for such a savior evaporated last week, forcing executives to conclude that bankruptcy was the only option.
As a result, San Francisco-based Quokka dismissed most of its staff of about 150 people, retaining just a handful of employees.
The sports media company had landed high-profile partnerships with NBC, the International Olympics Committee, and Major League Baseball. But those alliances could not protect it from an online advertising drought and investor apathy.
Rival sport sites have met a similar fate. Broadband Sports and Rivals.com recently shuttered operations. And CBS SportsLine said last week that it would cut its staff by more than 60 people.
The chapter 11 filing will shield Quokka from creditors while allowing it to reorganize its business.
By filing Chapter 11, the company could re-emerge as a slimmed-down content site--or another business entirely.
Friday's developments come just days after the precipitous descent of its share price.
On April 16, the company completed a 1-for-50 reverse stock split, which was intended to boost the shares above $1 and prevent the Nasdaq from delisting the stock. Before the reverse split, the shares traded at 7 cents.
After the reverse split, Quokka shares were initially valued at $3.50. But at the close of trading that same day, they had plunged by more than 50 percent. They continued their sharp descent during the following two days, closing last at 23 cents. The Nasdaq has halted trading in the shares since last week pending additional information from the company.
Quokka had been hustling to find a buyer before a May 1 deadline that would annul its agreements with NBC. Key to those deals was the coveted right to produce Web coverage for the 2002 Olympics in Salt Lake City.
Quokka had completed two rounds of layoffs since November, when it cut 90 positions, or 20 percent, of its staff. Earlier this year, it dismissed 217 employees, or 59 percent, of its work force.