Tustin’s MTI Corp., a seller of data storage computers and software from EMC Corp., is selling off its European operations for $5.5 million and filing for bankruptcy protection, the company said Tuesday.
MTI is filing for bankruptcy because of “continued operational and financial difficulties experienced by its U.S. operations,” the company said.
The company filed for bankruptcy reorganization but plans to dissolve, according to Chief Executive Tom Raimondi.
“After evaluating alternatives, we ultimately determined that seeking protection for MTI in bankruptcy will provide us with the best path to effect the sale of our corporate assets, including the sale of our European operations, and the wind down of our operations in an orderly fashion,” he said.
MTI plans to cut most U.S. workers and seek buyers for its remaining assets. Any unsold parts of the business are set to be sold off in bankruptcy proceedings, the company said.
The company trades on the low-profile Pink Sheets exchange with a market value of about $500,000.
Zinc Holdings LLC, a private equity firm, is buying the company’s European operations, which aren’t covered by the bankruptcy filing.
The deal is set to close in the quarter.
Zinc also is providing financing to MTI as it goes through bankruptcy.
MTI’s main creditor and shareholder is Utah’s Canopy Group Inc., started by former Novell Inc. executive Ray Noorda.
MTI got its start making computers for data storage networks in Anaheim. At one point, it was No. 2, albeit a distant one, to market kingpin EMC.
A few years ago, EMC invested in MTI and the company switched from making its own data storage computers to reselling EMC gear.
