PhotonEx Corp. is on the verge of becoming ExPhotonEx.

The company, reported to be closing several weeks ago, has filed for Chapter 11 bankruptcy protection (see Ex-PhotonEx? ).It's yet another high-profile crackup for a high-profile startup. PhotonEx, founded in 1999, claimed to be selling "the world's only commercially-available, field-proven," 40-Gbit/s, long-haul DWDM systems. The startup raised $178 million in three financing rounds. (See Photonex Has a 40-Gbit/s Idea, PhotonEx Set to Demo 40 Gig, and Photonex Scores Huge 3rd Round.)In the end, though, the company had between $1 million and $10 million of assets left to pay its debts, which add up to... between $1 million and $10 million. The bankruptcy paperwork also states that some funds will be available for unsecured creditors, of which there are more than 200.So where'd all the cash go? Some sources in the Boston area say PhotonEx hasn't exactly had a reputation for being frugal. "They liked to travel in first class," said one source.The company's creditors include chipmaker Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC); contract manufacturers Celestica Inc. (NYSE, Toronto: CLS) and Flextronics Corp. (Nasdaq: FLEX); analyst firms RHK Inc. and PointEast Research LLC; and, inevitably, the IRS.

From the beginning, the company had interesting technology that sounded almost too advanced for what carriers would ask for. "They need leap-frog technology that isn't so esoteric it scares off carriers," Scott Clavenna, then head of PointEast, now chief analyst at Heavy Reading, told Light Reading three years ago this month.Unfortunately for them, carrier budgets didn't allow for 40-Gbit/s systems nearly as quickly as the company had hoped. Sources say shortly after the company failed to get any part of the U.S. government's Global Information Grid Bandwidth Expansion (GIG-BE) business, its managers decided to wind down operations.— Phil Harvey, Senior Editor, Light Reading