Silicon Graphics Files For Chapter 11 Protection
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
May 8, 2006 6:56 a.m.

Silicon Graphics Inc., a long-struggling maker of high-performance computers, filed for Chapter 11 bankruptcy protection.

A group of bondholders agreed to trade their debt for a stake in the company, which filed for Chapter 11 protection Monday morning in U.S. Bankruptcy Court in Manhattan.

SGI is known for desktop workstations and larger server systems that are favored by engineers and others who demand sophisticated graphics, including Hollywood studios. But the company has suffered a long slide, partly due to competition from machines based on standard components used in personal computers.

The company's stock was recently delisted from the New York Stock Exchange for trading below a minimum threshold of $1 a share, and now trades on the small-cap OTC Bulletin Board.

Earlier this year, SGI replaced its top executive amid widening losses and lower revenue. Last month, the company said it expected revenue of about $108 million for the third fiscal quarter, well below guidance of $140 million to $160 million.