History (1997): Streamlogic in Chapter XI

The lifespan of the firm Streamlogic may prove short.

Last June 26, the company filed a petition in the U.S. Bankruptcy Court for the Northern District of California seeking protection under Chapter XI.

The company’s story begins when Micropolis, in 1994, in addition to manufacturing hard disk drives, was launching a storage subsystems division. The company designed one of the first software-based disk arrays, Raidion, and then one of the first AV storage subsystems.

But Micropolis experienced financial difficulties, and decided, at the end of 1995, to form a new subsidiary for this subsystem activity, which accounts at the moment for approximately $10 million in quarterly sales.

Singapore Technologies, interested in HDDs, went on to acquire Micropolis in March 1996, but was not at all interested in subsystems.

StreamLogic Corp. was then created, with Larry Smart, Micropolis CEO, becoming that of Streamlogic. He would be replaced by Michael Preletz in the beginning of 1997.

Along the way, Streamlogic acquires FWB’s hardware business.

But the venture doesn’t quite take off. Fourth calendar quarter sales were only $12 million, and the losses are piling up: $16.1 million for the 3 first months of this year.

The company was delisted from Nasdaq last June.

In order to stage a last-chance comeback, some drastic measures were taken:
– the sale of the assets of Raidion, MicroDisk and Gandiva product lines to Peripheral Technology Group (the letter of intent is subject to the Bankruptcy Court approval); the Raidion lines will continue to be manufactured by JMR and supported by third-party service center Valtron;
– an emphasis on Hammer technology (formerly from FWB), the most profitable activity;
– the sale of the company’s Videon technology to Sumitomo;
– an attempt to sell its video disk recorder technology;
– the hire of Mark Koziol, formerly with Memorex Telex, Storage Dimensions and SanDisk, to the position of VP sales and marketing;
– a company name-change, to HSSI (Hammer Storage Solutions Inc.).

This article is an abstract of news published on issue 116 on September 1997 from the former paper version of Computer Data Storage Newsletter.