Psystar files for Ch. 11

Psystar has filed for Chapter 11 bankruptcy protection through a federal court in Florida, documents show. Although a sign of serious financial trouble, the move will also grant the Mac cloner a temporary reprieve from an Apple lawsuit, charging Psystar with breaking the Digital Millennium Copyright Act and the license agreement for Mac OS X Leopard. All legal actions against Psystar have been put on hold while bankruptcy proceedings get underway; the hold may be lifted within a few months, at the discretion of the judge.

A moment of crisis could come for Psystar on June 5th, the first date of the bankruptcy hearings. The company will be forced to disclose its equity creditors at that time, which may either confirm or debunk Apple suspicions that Psystar has an unusual amount of outside support. Some 10 groups or individuals are argued to have contributed to Psystar's actions, though Apple has so far been unable to name them.

Despite the filing Psystar is continuing to sell its cloned PCs, such as the Open(3) computer. The systems come preloaded with Leopard, but only as a result of unauthorized hacking methods. The company has pursued a countersuit against Apple, accusing it of abusing copyright to block hardware competition.

by MacNN Staff