BenQ Mobile Goes Bust

Insolvency proceedings have been opened against BenQ Mobile, the German mobile phone arm of Taiwanese electronics maker BenQ, a court in Munich said on Tuesday.

Proceedings were opened on Monday after the court-appointed administrator Martin Prager failed to find a buyer for the company and its 3,000-strong workforce. BenQ filed for insolvency at the end of September when its parent company in Taiwan cut off financial support.

BenQ's production operations in Munich and Kamp-Lintfort would be shut down, the court said. Both sites formerly belonged to Siemens, which sold them to Taiwan-based BenQ in August 2005 because of disappointing sales figures and rising costs.

A spokeswoman for the Munich court said it was still possible that an investor could take over part of the operation during the insolvency proceedings.

Chairman of the works council, Michael Leucker told news agency AP he believed an unnamed German-American investor would step in Tuesday at the last minute to buy out the flailing mobile phone company, which could mean several hundred BenQ employees would get to keep their jobs.

According to reports, some 500 employees have already found positions elsewhere. If an eleventh-hour buyer doesn't turn up, the remaining 2,500 can receive a portion of their paycheck for up to a year, paid for by a state-sponsored transitional employment agency, until they can be placed in other jobs.