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Psystar Files for Chapter 11 Bankruptcy

Blames Economy for problems
By: Sean Kalinich | Posted: May 26, 2009 6:25 pm

Psystar, the little company that stood up to Apple and made expandable, affordable Mac Clones filed for Chapter 11 Bankruptcy protection today.


In the past they stood up to Apple in court and were not doing a bad job of disproving Apple's copyright infringement claims against them. However mounting debt and the costs of that legal battle have finally taken their toll.


Read more here.


Psystar Files for Chapter 11 Bankruptcy


"Debtor sales have been greatly affected by the decrease in consumer spending. The financial crisis has also caused creditors to tighten up their terms and become more demanding for immediate payment," the company said in a court document.


Psystar also blames its partner vendors' own financial problems, which resulted in Psystar having to pay higher prices on parts. At that point, Psystar was unable "to turn a significant profit in each sale."


The Chapter 11 filing will temporarily suspend Apple's copyright infringement suit against Psystar, which is currently before the U.S. District Court of Northern California. But once the bankruptcy protection is sorted out, the copyright case will resume. Apple had no comment on Psystar's bankruptcy filing.


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