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PLANO, TX – DZS Inc., a telecommunications equipment company, has filed for Chapter 7 bankruptcy, ceasing operations as of today. The company, alongside its subsidiaries DZS Services Inc. and DZS California Inc., submitted voluntary petitions in the Eastern District of Texas Bankruptcy Court.
The move comes after DZS Inc. explored several strategic alternatives to address its financial and operational challenges, such as seeking additional financing, out-of-court restructuring, asset sales, and debtor in possession financing for reorganization under the Bankruptcy Code. None of these avenues proved viable, leading to the decision to liquidate.
As a consequence of the bankruptcy, a Chapter 7 trustee will be appointed to oversee the liquidation of assets and payment of claims, according to the Bankruptcy Code. This process strips the company’s board of directors and executive officers of their authority and control over the company’s affairs.
Shareholders of DZS Inc. are unlikely to receive any distribution for their shares following the bankruptcy proceedings. Additionally, the commencement of the Chapter 7 cases may trigger defaults under the company’s various obligations, which could lead to an acceleration of debts. However, such defaults may be stayed under the Bankruptcy Code.
Furthermore, DZS Inc. has announced that the audit of its financial statements for the fiscal year ending December 31, 2024, was not completed. Consequently, the company will not be able to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or any future periodic reports.
This report is based on a press release statement.
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