Psystar Files Bankruptcy, Stalls Apple’s Case

Psystar logoUnauthorized Mac clone maker Psystar has filed for Chapter 11 bankruptcy protection in Florida, temporarily slowing down Apple's legal case against it. The filing may be an indication that the company's financial backers have pulled out, signaling they see Apple as the clear winner in court.

The bankruptcy documents were filed with the Federal Courts in Florida on Thursday, and Apple's legal team was most likely made aware of the situation over the Memorial Day weekend.

The Florida court will hold a hearing on June 5 where Psystar's equity creditors will be revealed -- which means if there have been deep pockets behind the company's fight against Apple, those names will finally come out of the shadows.

Psystar's bankruptcy filing will temporarily slow down Apple's case in northern California because all legal actions involving the PC maker are automatically put on hold while the bankruptcy court begins its proceedings. The judge overseeing the case will, however, most likely lift that stay within a few months, allowing Apple's case to start moving forward again.

Apple hit Psystar with a lawsuit claiming the company was violating the Mac OS X licensing agreement with end users, and that it was violating the Digital Millennium Copyright Act with the steps it used to install the Mac operating system on PCs.

Despite Apple's claims that the company doesn't have permission to sell PCs with Mac OS X, and now its bankruptcy filing, Psystar is still offering Mac clones for sale on its Web site.

Even if Psystar has plans of continuing its battle against Apple to sell PCs with Mac OS X installed, it isn't in a strong position to move forward once the Judge overseeing its bankruptcy lifts the automatic stay since it doesn't likely have money to pay for its legal defense. Without the cash to pay its legal team, Psystar probably won't have anyone to represent it in court, and won't be in a position to defend itself against Apple.

Source: Mac Observer

Tags: Apple

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