CNET: X10 files for Chapter 11

Damned cameras everywhere
but still can't find our cash

After receiving a business-jarring court defeat in the form of a $4.3 million dollar damages verdict, and on the very eve of the punitive damages hearing, X10 is attempting to file for Chapter 11 bankruptcy protection. The much reviled pop-under pioneer (actually, we now discover, the much-reviled pop-under imitator) filed a "deficient" bankruptcy claim, which essentially means that it failed to fully list its assets and liabilities, the key determinant for extending protection from debtors. Searching its figurative pockets, X10 claims to have somewhere between $1 and $10 million dollars in assets and about $10 million to $50 million in liabilities. But, hey, what's $10 million here or there? Especially when the jury is about to decide how much money to award the company that won its claim that X10 cheated it out of its business.

For anyone interested in a side bet, I'll put any amount on Sheppard Mullin Richter Ham, the friendly L.A. law firm representing X10 as the party first-in-line for the spoils. Their reported billings to date: $667,412 and counting. Other lenders, such as user experience-focused media sites Microsoft (half a million) and Yahoo (about a third of a million) had better start circling the carcass quickly. There is no guarantee that the courts will extend bankruptcy protection to the company, allowing it to continue under a restructuring, especially if it finds that money has been improperly siphoned away by management.

The bankruptcy filing certainly does come as a surprise, when it was just last year that X10 was crowing its purported status as the largest online advertiser in the realm. One would hope that all the Powerpoint presentations that used X10 as implicit justification for client pop-under spending can now be taken out behind their respective agencies and shot.