A creditor is seeking a court decree to force China's Proview into involuntary bankruptcy, but the company is confident the request will be rejected as compensation from its ongoing Apple iPad trademark case will be enough to pay back its debts.
According to a report Monday by Chinese news wire Xinhua, Fubon Financial last June had requested the courts to force Proview's Shenzhen-based subsidiary into bankruptcy after the latter was unable to pay its debts. Legal representatives from Fubon said, in February, it asked the Shenzhen court to expedite the bankruptcy, said Xinhua, which cited a report from Radio Taiwan International.
However, Proview's lawyer told the news wire that the court "will definitely not" accept the request because compensation from the rights to iPad trademark will be enough to pay back its debts. Apple resellers in some Chinese cities were ordered to take the tablet off the shelves while the dispute was being argued in court.
The Taiwanese electronics manufacturer had filed a U.S. lawsuit accusing Apple of fraud and unfair competition. It said the iPad maker had used another company as a front when it purchased the product trademark in China in December 2009.
According to Chinese bankruptcy laws, if the court agrees to Fubon's forced bankruptcy request, the case between Proview and Apple over the iPad trademark will cease. The case will only continue after the court has decided which entity will take over Proview's assets, said Xinhua.
Proview's lawyer acknowledged the debt issue, but said this would not affect the iPad trademark case which was already in its second hearing. "Negotiations between Apple and Proview is continuing. Future compensation from the iPad trademark will be sufficient to cover all of our debts. Therefore, the court will not accept the request to force Proview into bankruptcy," he said.