A Munich court has opened insolvency proceedings against BenQ Mobile after the mobile phone maker failed to meet an end-of-the-year deadline to find a buyer.
"The insolvency proceedings were officially opened Jan. 1," said a spokesman for Martin Prager, the insolvency administrator. "Production will now wind down."
Nearly 1,000 remaining staff had hoped an unnamed new investor would take over the company and save their jobs. But no investor filed a bid by the Dec. 31 deadline, according to the spokesman.
The insolvency proceedings, however, have created a new -- and possibly more enticing -- situation for investors.
Prior to the Dec. 31 deadline, potential investors were obligated to take over the entire company and its workforce, the spokesman said. As of Jan. 1, they can purchase a part of the company and are not required by law to take over any former employees.
Prager plans to hold a news conference on Wednesday to discuss negotiations with investors over the past few weeks and his planned steps moving forward.
BenQ Mobile has a main German plant in Munich and smaller factories at Bocholt and Kamp-Lintfort. The sites, which formerly belonged to Siemens AG, have already laid off around 2,000 people.
Siemens agreed to sell the plants to Taiwan's BenQ in June 2005, due to disappointing world sales of its mobile phones and high product costs.
But in August 2006, the new owner announced plans to cease investment in the German sites last year after concluding they were uneconomic. The move triggered a public outcry in Germany.
In December, BenQ decided to close a mobile phone research and development centre in Beijing as the company continues to slim its mobile phone operations. It has shifted work from the Beijing center to R&D labs in Suzhou, China, and Taiwan.