Linux firm seeks bankruptcy protection

French Linux specialist MandrakeSoft has hit the buffers but is trying to escape using France's equivalent of Chapter 11 bankruptcy protection.

Using the declaration de cessation des paiements, the Paris-based company can reorganise its liabilities, thought to be around €2m (£1.3m), and continue current operations under court control.

But although the company claimed it had reduced expenses and increased revenues recently, it could face an uphill struggle to survive against larger and better-known competitors Red Hat and the UnitedLinux consortium.

Earlier this month MandrakeSoft co-founder Gael Duval said the company was still in good shape despite its cash crisis.

James Governor, of analyst firm RedMonk, said the news would probably not greatly affect the Linux industry, although MandrakeSoft had a good name for usability.

Duval indicated that several companies could be interested in buying MandrakeSoft, but Governor predicted that a competitor takeover was unlikely.

"What are you buying with an open source competitor? You can easily migrate the user base to your own product instead," he said.

Governor thought that bringing its developments to the UnitedLinux consortium might have more merit, and suspected that funding could be provided by either the French government or European Union, due to their support for open source.

Another unknown is how MandrakeSoft's North American subsidiary will fare. It is currently the largest single revenue contributor to the company.

Mandrake Linux 9.0, which includes a desktop and the Mandrake Control Centre system configuration tool, has received positive usability reviews. Version 9.1 is just about to enter beta testing and includes the latest Linux 2.4.21 kernel.