Linked by Eugenia Loli on Wed 15th Jan 2003 17:28 UTC, submitted by FD Cami
Mandriva, Mandrake, Lycoris The liabilities accumulated by MandrakeSoft through a series of quarterly losses have prompted the company to file for "declaration de cessation des paiements". The filing, similar to the U.S. Chapter 11-Reorganization, took place on January 13, 2003. The company is now focused on Version 9.1 which will be announced as scheduled in April.
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So now...
by Micky Wicky on Wed 15th Jan 2003 17:47 UTC

I'm going to feel bad about moving to Gentoo!!
Seriously, Mandrake should be THE home distro for Linux... I hope they survive this.


Does anybody have good examples of companies that survived after filing under Chapter 11 ? I can't seem to think of any...

Actually, you need a sample of companies that survived the C11, *in France*.

Although definitely not a software company, Continential Airlines is one of the most notable companies that survived bankruptcy and completely turned their business around.

They should focus on the desktop
by Brandon Sharitt on Wed 15th Jan 2003 18:14 UTC

I think the source of some of Mandrake's troubles has been that they lost their focus on the desktop. When they did that they got behind some of the other desktop distrobutions like Lycoris.

Chapter 11.
by Simba on Wed 15th Jan 2003 18:15 UTC

I seriously doubt that a company as small as MandrakeSoft will be able to survive it though. After a bankruptcy filing, no creditor bank will be willing to lend them money for many years to come. It's going to be extremely hard for them to find capital even if they manage to survive the initial bankrupty.

Donald Trump has done it a few times.

It was predicted
by Remco on Wed 15th Jan 2003 18:21 UTC

Well, not exactly, but there were rumors everywhere of one major linux player going down, and of the Big Three (Mandrake/SuSe/Redhat) mandrake looked like the weakest link, no matter their products, they have less backing than the other two.

Chapter 11
by stahbird on Wed 15th Jan 2003 18:32 UTC

I'm still getting phone service from WorldCom/MCI. In fact, the surviving telcos are complaining about having to compete against the "zombie" companies operating out of Chapter 11.

But I agree with the comment that it will be tough for Mandrake to survive, except perhaps by laying off all but a couple engineers and trying to scrape by in runt mode. WorldCom and other famous bankruptcies had lots of cash, their problem was their debt was even greater. Mandrake probably doesn't have much cash and that's what their suppliers are going to demand from them for now on.

Yes, but Donald Trump's ability to generate hype, revenue and develop business relationships was never questioned. For Mandrake their ablity to lose money is the only thing never questioned.
Real estate is still "in demand"; trying to sell software to people who can easily get it for free is hardly a dealmaker in this climate.

I agree. In was just giving an example of a successful chapter 11. Hopefully with contributions from other posters we can identify a trend of the companies that were successful and then assess the relative likelihood of Mandrake surviving.

I myself believe that unless Mandrake gets a major investor they will die. They have stated that they want to target the corporate market. Why would any company ever choose Mandrake now that their survival is an issue when there are so many comparable alternatives without the problems (SuSE, Redhat). Even the personal user would probably not move to Mandrake now.

I do hope they survive now though.

Let's hope
by vlad on Wed 15th Jan 2003 18:49 UTC

I also hope they survive, it's my favorite distro, i'd feel really sorry if they didn't make it.

poor mandrake
by Aerick on Wed 15th Jan 2003 18:51 UTC

I have to admit, Mdk7 was my first distro. It was a great learning tool, but after a point it just got annoying and you want to move on. It will indeed be sad to lose a good "starter" distro - but as ease of use is a growing trend in the linux market, its not like new users don't have options as it was initially.

Begging people to "donate" was the first sign; this latest stage is just the inevitable. I do not see Mandrake surviving, especially after all this bad publicity. Their focus should have remained on the home user's desktop. Taking on Redhat was a big mistake - their interface is not even refined yet!

Rest in peace.

...
by CrackedButter on Wed 15th Jan 2003 19:02 UTC

I hope it dies a quick death, i hated MD everything was just inferior when up against SuSE.

I lost 2 hard drives (on seperate pc's) trying to install it as well.

I have nothing against MD though! ;)

Well...
by Lennart Fridén on Wed 15th Jan 2003 19:14 UTC

...things certainly look grinm for MDK.

Re: CrackedButter
by Bascule on Wed 15th Jan 2003 19:28 UTC

I hope it dies a quick death, i hated MD everything was just inferior when up against SuSE.

Well, I'm afraid I can't sympethize with your viewpoints regarding SuSE, but I certainly can in regards to Mandrake.

When I started working here every system was Mandrake, including the servers. Many of the systems weren't installed properly and have horrible issues (one of my favorites is when Mandrake's hacked bootloader uses a video mode which isn't supported by system's monitor, so you have a nice readable text output from the POST, then the bootloader switches to a graphics mode and you can't see what's going on. The same holds true for Aurora, which wouldn't be an issue if you could see what was going on during the bootloader, but I already addressed that point ;)

Ultimately what it comes down to is that if Mandrake wants to make everything graphical, they need to do a *much* better job of making sure the hardware support is in place.

After two years, I'm happy to say that I'm down to only two remaining Mandrake machines. The desktops have been replaced with either Windows or Debian and the servers with either FreeBSD or Solaris.

this could help solve their financial problems
by Panic on Wed 15th Jan 2003 19:47 UTC

During the dot-com boom Mandrake signed contracts regarding e-Education with many bankrupt / troubled dot-com companies. Mandrake has pulled out of those contracts and is now in the penalty phase. These companies want to collect their penalties from Mandrake and Mandrake cannot make the payments.

Under French bankruptcy law these penalties would be voided and the remaining company (the company that sells a Linux distribution) would be viable. So by threatening bankruptcy all they really mean is walking away from their e-Education related debts. This may or may not be a tactic to get the e-Education creditors to be willing to take 10 cents on the dollar rather than the nothing they would get under a bankruptcy.

This will be interesting...
by Datschge on Wed 15th Jan 2003 19:50 UTC

Now that everything depends on Mandrake 9.1 I wonder how it will turn out. Maybe we'll get some real innovation for a change...

2 comments from me
by Nicholas James on Wed 15th Jan 2003 19:52 UTC

Does anybody have good examples of companies that survived after filing under Chapter 11 ? I can't seem to think of any...

Kmart

Good thing I got SuSE.

KMart
by Simba on Wed 15th Jan 2003 20:04 UTC

"Kmart"

Not yet. Kmart just announced they will be closing several more stores in my state and laying off many more people. If Kmart survives, they are going to be extrmemely small indeed. And many analyists don't think Kmart will survive, and instead, they will be liquidated.

mdk...
by akira on Wed 15th Jan 2003 20:19 UTC

i started out using mdk 8.1. it was great to learn on, up until the point i wanted to install outside software. man did that pound the meaning of rpm hell into me. i could not install a single peice of software with out getting numerous depend. errors. i now use SuSE which seems to have a better approach. they're support is lacking <written three times about my NVIDIA drivers> but all in all, SuSE is by far a superior OS. It rivals mdks ease of use when it comes to install. And YaST is like nothing i have seen in other distros....


that's my $.02

Re:Kmart
by Nex6 on Wed 15th Jan 2003 20:42 UTC

kmart will die becuase its a crappy store, and its up agianst target, walmart and the like.

whatever you may think of MDK it's a first rate distro,

so comparing a badly run, dirty store to MDK is foolish.

MDK just made some bad finanicail choices, other then that there a pretty good company.


Nex6

RE: Re:Kmart
by Andrew on Wed 15th Jan 2003 21:14 UTC

KMart probably has a better chance of surviving for the following reasons:-

1. They have a large asset base (I am assuming they do, they must have).

2. More importantly KMart resells goods, they don't actually make anything themselves. Mandrake makes stuff. Would you want to buy something you knew you could not get support for, or the tools you used would not be improved. If Kmart sells GE coffee maker they care little what happens to KMart because they can always go to GE.

I bought Mandrake...
by Bobthearch on Wed 15th Jan 2003 21:31 UTC

Mandrake is the only Linux that I bought - Mandrake was one of only a couple that could be physically seen in stores. And the price was very competitive ($60 for the Powerpack Deluxe). I really liked that it came with real manuals.

Since I don't live in the city anymore I never see any Linux boxes in stores. I was wondering what the availability is like now. How many Linux distros can be physically shopped for at Circuit City or CompUSA? Is Mandrake still priced reasonably?

I wonder if their sales were dependent on the early Linux media exposure. That hype seems to have dried up - no more t.v. ads, no more Time articles, etc.

Re: KFart
by amreshmd on Wed 15th Jan 2003 22:04 UTC

Very Funny....

sorry..
by Bas on Wed 15th Jan 2003 22:46 UTC


I feel sorry for Mandrake and all its developers/personal.
They brought Linux to the mass....made it possible for my
dad to use Linux. Pitty if the go.

Well even if ....
by Anonymous on Thu 16th Jan 2003 00:22 UTC

Well even if MandrakeSoft (the Company) dies I doubt it will be the end of Mandrake Linux. All Mandrakes tools are GPL'd so they can be used by the community and Cooker community doesn't seem heavily dependent on MandrakeSoft.
It possible we could end up with a debian like distro run by the comunity owned by no one the differece would probably be more frequent releases, urpmi/rpm based and aimed at the desktop.

The community needs funding too
by Hanzos on Thu 16th Jan 2003 00:48 UTC

Just because its run by the community where the hell will the community get money to pay developers? The air?

comments
by sam on Thu 16th Jan 2003 01:13 UTC

>>>>Just because its run by the community where the hell will the community get money to pay developers? The air?

It will be run and bankrolled by the next sucker who thinks he has a brilliant business plan so that he can contribute 1% effort and get the other 99% from the community.

Basically it's the same business plan behind buying professional sports teams in North America. There will always be a city willing to contribute money to build a new stadium. There will always be a richer sucker who will pay an even higher obscene price for your sports team.

I hate to say it
by Aitvo on Thu 16th Jan 2003 02:35 UTC

Well, their distro sucked. Sure it was tops in 1997, but they did NOTHING to make it a good desktop OS, hell in 6 months RedHat surpassed Lycoris, and Lindows what did Mandrake do? Beg for money. Get rid of your officers, and build a real desktop OS. If you can do that you may well get my money.

for KFART
by Eugenia on Thu 16th Jan 2003 03:32 UTC

Please stop this madness. Please be serious, this is a serious thread, people might lose their jobs, please try to discuss instead of writing useless things.

Wonder? Buy out?
by skinnyp on Thu 16th Jan 2003 08:18 UTC

I wonder if redhat or suse will buy out Mandrake? Just a thought!

Re: Wonder? Buy out?
by rajan r on Thu 16th Jan 2003 12:02 UTC

There is no reason for any company to buy out Mandrake. They have no assets. All their applications is available under GPL. Red Hat and SuSE could easily hire their programmers if they want. And finally, their products weren't all that great in the first place.

The reasons above is precisely why Mandrake would die. Even if they survive Chapter 11, at the end they would fail. They have no assets for crying out loud. Their products on the other hand is getting less and less better compared to their competitors. Plus, their marketing skill is extremely low, along with their professional image.

Their business model is akin to a non-profit organization rather a real business.

Re: Eugenia
by Anonymous on Thu 16th Jan 2003 13:38 UTC

Sorry but people lose their jobs everyday....am I suppose to care...no because just like anyone else you can lose you job in a heartbeat......its only a job...there is always more opportunties out there to be had.

my2cents

Ch.11 is not Ch. 7
by vlad on Thu 16th Jan 2003 16:35 UTC

It's for getting creditors off your back.
If you have big credit card bills you can declare your own bankrupcy too. Just sell the stuff first (yacht, house, Porsche , wife and kids). Just kidding about wife and kids, although it makes sense to divorce too - so they would keep all your money, while you're in a hole.
On more serious note, it's a pity that Mandrake closed just before LinuxWorld. Although their business model was questionable from the beginning it's the tendency in Linux community that is depressing. Mandrake is just one of most visible Linux companies- small ones are not making into news. On the other side we got Lindows instead. And Xandros. It's normal life of business - some companies die some start a new. The overall growth is more important.
But in some cases it's hard to say what is better ch.11 or ch.7 In retrospect, I think that ch.7 for Be was better way out. I count my losses, dried my eyes, changed pants and start a fresh.

PS. that previous 'vlad' is imposter - my favorite Linux distribution so far is gentoo.