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Psystar Files for Chapter 11: Apparently, Drawn-Out Legal Battles With Apple Aren’t Lucrative

PsystarPsystar, the company that drew attention to itself first by offering Apple (s aapl) clones for sale with OS X pre-installed, and then by facing off against the Cupertino, Calif.-based computer maker in court, is officially filing for Chapter 11 bankruptcy, according to The Mac Observer. For those keen on the subtle distinctions of having no money, Chapter 11 is the one where you still have to pay off some of your debt, whereas Chapter 13 is the really, really bankrupt, clean slate kind of broke.

The clone maker claims that its financial troubles aren’t due to the Apple legal battle, which is still unresolved, but instead the weak economy and supplier prices. Even if that’s true, it doesn’t really paint the Mac cloning game as a very appealing one for others watching the space. Some think the bankruptcy is related to financial backers finally pulling their support out from under the beleaguered company, which doesn’t look to be in a position to become profitable anytime in the near future, even if demand was higher for its products.

Others, however, are claiming that the move by Psystar is actually a calculated legal maneuver designed to buy time for the company, since all legal actions it is involved in are automatically put on hold as a result of the bankruptcy filing. Still, it doesn’t put the company in a strong position once proceedings are resumed, which is likely to occur in a couple of months when the judge in the case ends the temporary stay.

Maybe the most interesting thing to come out of this declaration of bankruptcy will be the revelation of Psystar’s creditors. Deep pockets have been funding its ongoing court and legal costs, and so far, the identities of those involved have remained a mystery. Who knows — maybe we’ll see a certain Mr. Ballmer or Mr. Gates listed among those who’ve helped out the clone maker. Kidding.

If you’re interested in the juicy (read: dry) details contained in legal documents pertaining to the bankruptcy declaration, has a veritable banquet at which you may feast.

10 Responses to “Psystar Files for Chapter 11: Apparently, Drawn-Out Legal Battles With Apple Aren’t Lucrative”

  1. You see, the reason why they were selling those things was because they were at the right price. Meaning, alot cheaper for what a real Macintosh would be selling for! I hope more people do things like this to alert people to Apple’s eroneous prices!

  2. I doubt very much a Mr Gates or Mr Ballmer or indeed anything MS related will appear in the list of funders. MS may have produced Vista but they are still very smart when it comes to being a business. To fund something like this would be downright silly.

  3. Herman

    This is obviously bad news for the Psystar employees. I can only hope they don’t get stigmatized for the Apple lawsuit and will remain employable in the business.

  4. Leland

    Prevent competition? Are you kidding me? Psystar was blatantly disregarding the policy that one must sign in order to use Mac OS X. I can think of no reason why selling “pre-made hackintoshes” could be considered competition, or even business.
    Apple did what any company would do to an illegal reseller: they brought them to court.

  5. Terry

    Correction: Chapter 13 is a re-payment plan, just like Chapter 11. The only difference is Chapter 11 is when you have liabilities of over $1,000,000.00. Chapter 7 is the wipe the slate clean kind of bankruptcy.