LightPointes Demise Leaves Companies in the Lurch

LightPointe Communications' sudden demise during a Labs evaluation serves as an abject reminder of the dangers inherent in relying on a small startup for critical network components.

LightPointe Communications sudden demise during our evaluation of its FlightExpress 100 was an abject reminder of the dangers inherent in relying on a small startup for critical network components—all LightPointe support and sales operations seemingly went dark overnight.

/zimages/4/28571.gifClick here to read more about Labs tests of LightPointes FSO wireless solution at UC Berkeley.

LightPointes board of directors—which included representatives from venture capital companies Sevin Rosen Funds, Ampersand Ventures and Rho Ventures—quietly pulled the plug on May 15, letting most LightPointe staff and their public relations company go that day.

Consultancy Sherwood Partners has been brought in as assignee for an ABC, or assignment for the benefit of the creditors, which is basically a nonjudicial wind-down of a company. Sherwood, of Palo Alto, Calif., will monetize LightPointes assets and IP (intellectual property) to obtain the best value for creditors.

Michael Maidy, co-founder of Sherwood Partners, informed eWEEK Labs that LightPointes demise was, indeed, a surprise to the business community. "Generally, there is a soft wind-down where people are aware a company is in trouble," said Maidy. "I understand that this hit the wall at 80 miles an hour."

Although Sherwoods involvement in the LightPointe case was too recent for Maidy to speak in much depth about the situation, he indicated that Sherwood will move quickly to liquidate LightPointes assets: "The sooner you sell it, the more likely you are to get value for the IP because part of the IPs value is the people," said Maidy. "If you dont have the people around to support or transition the IP, then you will lose substantial value."

Maidy informed us that messages left with LightPointe are being retrieved, and Sherwood analysts are assessing whether to keep a crew available to support current customers while an acquirer is pursued. Since LightPointe employees have already been let go, Sherwood would need to selectively rehire people on a temporary basis to man this crew.

However, when we tried contacting customer support in the days following the announcement, the customer support number dropped our call with a fast busy signal.

Companies with existing LightPointe deployments can try contacting the reseller that helped with the upfront installation for support queries, but, until the ABC proceeds further, support may be tough to come by.

In the days to come, we expect to hear more definitive information about the fate of LightPointes technology, but customers with existing LightPointe deployments are advised to start investigating alternatives immediately.

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