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Mayan has filed for Chapter 11, but it's business as usual at Vital Network Services, its recent acquisition
November 7, 2001
The strange story of Mayan Networks Inc.keeps getting stranger. On Monday, November 5th, the company filed for Chapter 11 bankruptcy protection in the Northern District of California.
This latest development was not completely unexpected. Rumors had been circulating for more than two weeks that the company had shut its doors (see Is Mayan Done Yet?). And while the Website still appears to be active, no one is answering the phone at Mayan or forwarding calls to executives.
But the reality is that no one has actually been working at Mayan for at least two months. Most of the company’s employees have either left or been transferred to Vital Network Services, the network services division of General DataComm Industries Inc. (GDC) that Mayan acquired in September.
Mayan had essentially cancelled all development of its multiservice provisioning product back in February, according to sources close to the company. But the company’s coffers were full, with over $90 million in venture funding, so executives and board members decided to leverage its cash position to make Mayan a holding company with several subsidiaries supporting it.
In September, the company completed one of its two announced acquisitions. It finalized the acquisition of Vital Network Services, which it had bought for $23.5 million. Then in October, it announced the cancellation of the acquisition of Ariel Corp. (Nasdaq: ADSP), a publicly traded company that makes remote access gear equipment (see Mayan Makes Vital Buy and Mayan Cancels Ariel Merger).
Now that Mayan has officially sought bankruptcy protection, the big question is: What will happen to Vital Network Services? So far, the outlook is good. The division, which currently employs roughly 300 people worldwide and generated revenues of $48 million last year, has been kept out of Mayan’s Chapter 11 filing, says John Woods, president of Vital Network Services. This means that the subsidiary can still operate without any interference from the bankruptcy courts.
“Luckily, we are at arms length from Mayan, and we are not -- and I repeat not -- part of the Chapter 11 filing,” he says. “ We have many opportunities open to us. There were several companies interested in us before, and even some of Mayan’s investors are looking at us.”
In fact, Mayan’s purchase of Vital could be seen as a Godsend. The company’s former owner, General Datacomm, filed for Chapter 11 on November 2 in Wilmington, Del., only three days before Mayan filed (see GDC Files for Chapter 11).
“If we had still been with General Datacomm, we would have been included in the Chapter 11 bankruptcy and we could have been hacked,” says Woods. “At least Mayan freed us of that.”
And if Mayan’s history is any guide to its future, the company may not be finished yet. It seems to have a way of popping up even after the rest of the industry thinks it's dead.
— Marguerite Reardon, Senior Editor, Light Reading
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