The Newport News-based Navidyne Corp. has filed for reorganization under Chapter 11 of the federal bankruptcy law.
The petition is expected to be reviewed by U.S. Bankruptcy Court Judge Hal Bonney, who has been asked to free assets needed to meet the Navidyne payroll, which could not be met during the last two weeks.
Court papers filed last week show that Navidyne, a maker of satellite navigation and communications equipment, has debts totaling $3.7 million. This includes $1.6 million in unsecured debt.
Mel Overman, Navidyne's chief executive officer, said the Chapter 11 proceeding provides a chance to rejuvenate the 11-year-old company. "We are not liquidating, we are reorganizing," he said.
Overman was named Navidyne president last month after the company had operated at a loss for more than a year. The company's board, dominated by representatives of venture capital groups that own Navidyne's preferred stock, ousted A. Clifford Barker as president the same day.
Acquisition of Navidyne by Systems Management American, a Norfolk company that specializes in computer systems integration, was announced a week later. However, the transaction was canceled Sept. 24, initiating a flurry of meetings that culminated in the bankruptcy action.
Navidyne will continue operations under the plan being prepared for the bankruptcy court. The number of employes has dropped from 126 to about 50.
The largest debt listed by Navidyne is a $2.14 million secured debt owed to Sovran Bank. The company reported that it owes money to 573 creditors, but only the 20 largest were identified in documents filed Tuesday. These totaled $639,522, exluding the Sovran debt.