A year after changing its name from Merlot Communications, a subsidiary of BAXL Holdings Inc. filed for bankruptcy protection from creditors as it attempts to clean its balance sheet of red ink ”“ while sacking most of its staff without severance.
Bethel-based BAXL Technologies Inc. designs devices that digitize standard telephone, Internet and video signals for transmission to hotel rooms and apartments, including over wireless broadband hubs.
In September 2007, BAXL completed a so-called reverse merger with Allmarine Consultants Corp., a shell company whose stock was traded on the over-the-counter bulletin board. In conjunction with the merger, BAXL raised $8.5 million in a private placement of stock.
In the first quarter of 2008, the company lost $1.5 million on sales of $550,000, reducing its cash reserves to $100,000.
In July, the company revealed it is laying off about 20 people, constituting most of its work force.
After BAXL explored a sale of the company in May, it defaulted on a loan owed to director Edward Arnold, the former owner of a warehouse company that got its start three decades ago handling distribution for IBM Corp. of Armonk, N.Y.
Today, BAXL is run by Gus Bottazzi, a former Novell Inc. manager who subsequently became CEO for the predecessor company to Greenwich-based Halo Technology Holdings Inc.
Merlot Communications was founded in 1997 by Michael Centrella, who cobbled together seed funding from Connecticut Innovations, a state-sponsored venture capital firm with offices in Rocky Hill; and in 1999 raised $10 million in funding from several other venture capital firms.
Centrella left the company, however, to take a sales job in 2001 with a then-obscure New Jersey company called Vonage, and is a consultant today in New Jersey.
BAXL leases 11,000 square feet of space at 6 Berkshire Blvd. on the Bethel-Danbury line. At last report, the company”™s lease was scheduled to expire in December.
Its shares, meanwhile, traded at 35 cents in late July, down from $2.30 in October.
The company is not alone in that respect ”“ the Dow Jones Wilshire Global Telecommunications Index was off 26 percent from a year ago. Shares of TranSwitch Corp. are down by half over the past year, with the Shelton company the lone other maker of communications equipment based in Fairfield County whose shares are publicly traded.
Chapter 11 bankruptcy filings are intended to allow companies to continue operating by clearing their balance sheets of overwhelming debt and covenants, at the same time making it far more difficult to carry on business as usual due to the oversight of bankruptcy court receivers.
BAXL”™s largest unsecured creditor is Colubris Networks Inc., a Waltham, Mass., company that makes wireless routers for use in buildings, which is owed $250,000 by BAXL. Last week Hewlett-Packard Co. announced plans to acquire Colubris, with the companies not initially disclosing the acquisition price.
