Luna Innovations files for bankruptcy
- July 17, 2009
Roanoke-based Luna Innovations Inc. filed for Chapter 11 bankruptcy protection in a Virginia court Friday.
The move follows a California jury’s ruling in April that ordered Luna to pay $36 million to Hansen Medical in a dispute over breach of contract and misappropriation of trade secrets. Luna Innovations develops and manufactures products for the health and telecommunications industry.
“In the absence of reasonable settlement of that dispute, we believe that today’s filing is in the best interests of Luna and our shareholders, creditors and communities, while providing the first step toward securing a future for Luna,” Kent Murphy, Luna’s chairman and CEO, said in a statement. “We intend to build on our history of innovation and product development, outstanding products, and excellent customer service.”
The company said it expects to emerge from bankruptcy, and will continue with normal operations and employment under bankruptcy. As part of the reorganization, Luna is asking the Virginia court to estimate Hansen’s claims to be $1.3 million. That would allow the company to pay all of its creditors, according to Luna’s statement. The company has asked California courts to reduce the award to Hansen.
“The plan that we proposed and filed today, if confirmed by the court, would pay our creditors on their valid claims and leave our current shareholders in place while allowing us to continue to build upon the recent achievements of this company and the potential of our product pipeline,” Murphy said.