Aurigin Systems Inc., an intellectual property analysis software developer, has been operating without leadership, having lost its entire executive management team and board of directors earlier this month.
The reasons for the mass resignation, which included six executives, remain unclear, but, according to several sources, they involve clashing opinions among investors regarding funding terms as well as personality conflicts.
The Cupertino, Calif., company remained technically in business as of press time late last week, and its servers, on which numerous Fortune 500 companies rely for IP asset management, were still running, according to former CEO Kevin Rivette. "The company still has almost every single employee down there working at minimum wage," Rivette said, adding that he did not know whether he would return.
Industry observers expect Aurigin to seek bankruptcy protection and sell its assets—including its own intellectual property—but a board of directors will likely have to be reconstituted before a decision can be made. Investors include American Express Co., Battery Ventures, The Blackstone Group, IDG Ventures, Robertson Stephens Inc. and Reuters Group plc., among others. Several sources confirmed that acquisition discussions are taking place.
Rivette told eWeek that he and the board resigned over "something pretty upsetting," but he declined to elaborate, saying that disclosing details could prejudice developments in progress.
"Its a long, involved story," said Rivette, who is still a shareholder in the company. "This is a story that should probably be a book. Its really a tangled web."
One employee who remained at the company last week, Brent Larson, declined to comment on the companys direction.
Observers were surprised by the companys troubles. "They did have a lot of customers," said an industry source. "This could be an opportunity for another player in the space to fortify a dominant position in this market."
One potential suitor, some said, is another intellectual asset management company, Delphion Inc. Late last year, the Chicago company was planning to move into Aurigins target software market space.
However, Delphion CEO Woody Ritchey said last week that hes not interested in buying Aurigins assets, mainly because the two companies already share many of the same customers.