Struggling language recognition software maker Lernout & Hauspie Speech Products NV (L&H) won a two-month extension from a Belgian court to better prepare for a special shareholders meeting. The company is facing bankruptcy and must appoint a new board of directors and clarify its accounts after accounting errors and irregularities forced an earnings restatement.
The commercial court of Ieper in L&H’s home country of Belgium postponed the deadline until May 1, from March. The company filed for Chapter 11 bankruptcy in the United States as well as Belgium. L&H has been delisted from The Nasdaq Stock Exchange, but more than 50 percent of its shareholders, and more than half of its assets, are in the United States.
The Ieper court is investigating L&H for fraud, company officials confirmed in December. A highly critical audit of the company’s books recommended L&H restate its finances for 1998, 1999 and the first two quarters of 2000, blaming senior management for failing to ensure proper financial reporting.
The report recommended disciplinary action for several employees, many of whom have resigned. Co-founders Jo Lernout and Pol Hauspie resigned in November as co-chairmen and managing directors, while Gaston Bastiaens, former chief executive officer, and Nico Willaert , former managing director, resigned from the board of directors. L&H suspended Joo Chul Seo, former director of L&H’s South Korea division, for allegedly using US$30 million of an L&H venture capital fund as collateral for personal loans.
The company also lost two top executives last week. Former chairman Roel Pieper resigned on Thursday, two days after former chief executive John Duerden resigned from the board. The board currently has six members, down from 19.
Lernout & Hauspie, with dual headquarters in Ieper, Belgium, and Burlington, Mass., can be reached at http://www.lhsl.com/.
