SAN JOSE, CA — (Marketwired) — 11/27/13 — OCZ Technology Group, Inc. (NASDAQ: OCZ), a leading provider of high-performance solid state drives (SSDs) for computing devices and systems, today announced that on November 25, 2013, it received notices that Hercules Technology Growth Capital, Inc. (“Hercules”) took exclusive control of the Company’s depository accounts at Silicon Valley Bank and Wells Fargo Bank, National Association. As set forth in the Company’s recent SEC filings, Hercules and the Company are parties to a loan and security agreement. As previously reported, the Company is not in compliance with certain of the operating ratios and covenants in the loan agreement. As a result of such action and pursuant to Hercules’ written instruction, the depository institutions disbursed the cash in the Company’s respective accounts to accounts under the control of Hercules.
The Company has received an offer from Toshiba Corporation to acquire substantially all of the Company’s assets in a bankruptcy proceeding. The parties have substantially completed negotiations on an asset purchase agreement and OCZ believes that all the material terms have been agreed to. The agreement is subject to various conditions: the preservation of the value of the business, including the retention of employees, the negotiation and execution of definitive documentation, the filing of bankruptcy petitions by the Company and certain of its subsidiaries, Toshiba’s offer being accepted by the bankruptcy court as the highest and best offer under the circumstances after an auction process conducted under the relevant provisions of the United States Bankruptcy Code, and other customary closing conditions. The Company expects to file a petition for bankruptcy shortly after completing final documentation with Toshiba and Hercules, and to conduct the court-supervised auction process to attempt to maximize the value of the Company’s assets and operations in an orderly process. More details will become available when the Company files its petition for bankruptcy.
If the Company is not able to agree to final documentation with Toshiba, the Company expects to imminently file a petition for bankruptcy and liquidate.
More at source