Foxconn-Backed Fuhu Files for Bankruptcy With Offer From Mattelby
Maker of tablet computer for kids plans to sell all assets
Proposes January auction starting with $9.5 million Mattel bid
Fuhu Inc., the Foxconn Inc.-backed maker of a $9.99 tablet computer for children, filed for bankruptcy to auction its assets, with a starting bid of $9.5 million from Mattel Inc.
Fuhu makes “nabi Pass Tab,” an Android-based tablet loaded with content from providers including Walt Disney Co., Discovery Communications Inc. and National Geographic Kids, according to the company website. Partners also include Chase Paymentech, PayPal and Skype.
Disputes with supplier Foxconn have resulted in canceled orders to Wal-Mart Stores Inc. and other retailers, people familiar with the situation have said.
Foxconn, which also makes the iPhone, bought a security interest in 35,000 tablets it sold to Fuhu in October, according to court papers. Fuhu said it’s in a dispute over Foxconn’s alleged “mishandling of products intended for sale during the 2014 Christmas season and other events,” and that Foxconn “claims to be owed approximately $61 million on an unsecured basis arising from unrelated transactions.”
Fuhu listed assets of as much as $50 million and liabilities as high as $500 million in the Chapter 11 petition filed Monday in Delaware bankruptcy court. Investors in the company include Intel Capital Corp., LG Display Co. and KDDI Open Innovation Fund LP, according to the filing.
Fuhu said it has been marketing its assets since September, and more than 500 potential bidders have been contacted. The company said it’s still in some discussions with interested parties.
Competing bids or objections are due by Jan. 21, with an auction no later than Jan. 25, and the sale should go up for court approval by Jan. 29, under the proposal outlined in court papers.
The case is In re Fuhu Inc., 15-12465, U.S. Bankruptcy Court, District of Delaware (Delaware).