L&H files for bankruptcy protection

Lernout & Hauspie (L&H) has filed for US chapter 11 bankruptcy protection following a financial probe and the recent resignation of its top directors.

According to US reports yesterday, creditors had set a deadline of Friday for the Belgium speech recognition software specialist to repay its debts or unveil a restructuring plan.

John Duerden, president and chief executive, said: "We have tried, without success, to reach an acceptable accommodation with our bank lenders. After an intensive analysis of L&H's worldwide business operations and a careful assessment of its financial position, we concluded that a voluntary reorganisation filing is both prudent and necessary."

The filing follows an independent audit into the company after a US newspaper report claimed that some companies, which L&H identified as Korean customers, denied doing any business with the vendor. This led the company to restate its financial reports for 1998 and 1999.

Earlier this month, three of its directors, including co-founder Pol Hauspie resigned. Former managing director Nico Willaert, and former chief executive and president Gaston Bastiaens, also quit their posts.

Chapter 11 offers companies a safe haven from bankruptcy while they attempt to sort out their financial difficulties.