Backed into a corner by creditors, Osborne Computer Corp., once the darling of portable computer owners, said yesterday that it had filed for protection under federal bankruptcy laws. The company also said that three banks had agreed to provide it with bridge capital as it searches for a complete rescue package.
Osborne, which 2 1/2 years ago was the first entry into the lucrative portable computer market, once grossed over $100 million in annual revenues and employed more than 1,000 persons. After a final round of layoffs last Friday, the company now employs fewer than 100 and has halted manufacture of its portable computers.
The bankruptcy declaration follows a lawsuit filed against Osborne by Testology Inc. and PH Components Inc., two San Jose, Calif., firms run by businessman Porter Hunt. The suit claims that Osborne owes the firms $4.5 million for various computer components and for backing out of an agreement to buy a large quantity of components Testology was preparing for delivery.
"We needed the protection," Donald L. Waite, Osborne's vice president of finance, said in a telephone interview. "We are now pursuing a variety of discussions."
Waite would not say whether Osborne had a positive cash flow or if it was seeking to be acquired.