General Magic files for bankruptcy

The move by General Magic comes as a formality, given the Sunnyvale, Calif.-based company officially closed its doors in September, citing its inability to obtain more financing as well as adverse economic and market conditions.

General Magic, which announced late Thursday that it filed Chapter 11 in U.S. Bankruptcy Court for the Northern District of California, said in a company statement it took the action to be able to continue marketing its assets and keep on winding down its affairs in an orderly process.

Under Chapter 11, a company is allowed to restructure its operations while keeping creditors at bay. The company plans to use the proceeds from its asset sales to repay creditors. However, under most bankruptcy cases, creditors often receive pennies on the dollar.

The bankruptcy filing brings a final act to a company that had bold beginnings--but which ended with an ever-revolving business model. The company, founded in 1990, offered the promise of improved intuitive computer interfaces.

Although it initially lined up such lofty customers as AT&T, Sony and Motorola for its technology for personal digital assistant devices, it later changed its game plan to software-agent technology and then voice-recognition software. Most recently, General Magic had been providing technology to General Motors' OnStar dashboard computing service.