Cary-based Connexion Technologies has filed for bankruptcy.
The company, which also operates under the name Capitol infrastructure, recently laid off two thirds of its employees.
Investors in Connexion, whose chief executive officer is former Cary Mayor Glen Lang, include Jim Goodnight. The billionaire is CEO and co-founder of Cary-based SAS, an international software firm.
The Chapter 11 voluntary bankruptcy filing was made on Thursday in Delaware.
The company listed debts of up to $500 million.
Connexion provides television and Internet services to multi-family housing complexes.
In court papers, Lang said a “deteriorating relationship with DirecTV and their overall corporate complexity made it highly unlikely the debtors would be able to obtain adequate financing in a timely fashion,” Bloomberg news reported.
In a statement provided to Bloomberg, DirectTV said it acted properly in terminating contracts with Connexion.
“Connexion, and Connexion alone, needs to take responsibility for their current situation,” spokesman Robert Mercer said. “Under the terms of our arrangements with Connexion, we properly exercised our right to terminate some contracts for business reasons.”
Dow Jones news reported that Connexion said it has $500,000 worth of assets and added that Connexion is seeking court approval for $4 million in bankruptcy financing from UniCredit Bank.
Connexion informed the state Department of Commerce on March 14 that it would be cutting 140 jobs at its Cary headquarters, effective the next day.
The company laid off about 80 people from its workforce of about 600 in January.
Connexion faces a wrongful-termination lawsuit due to short notice given affected employees.
The suit also alleges that DirecTV quit doing business with Connexion because it “learned of alleged fraud committed by the defendant,” Dow Jones said.
The suit was filed earlier this month by a former Connexion employee who worked in Alabama.
“Defendant could reasonably foresee the business circumstances that caused this mass layoff as its primary customer, DirecTV learned of alleged fraud committed by Defendant and terminated the business relationship,” the suit reads.
Founded in 2002 by Lang, Connexion works with partners like satellite, cable and telecommunications firms to deliver video and data services.
There was no immediate word on the reason for the latest cuts. The January layoffs resulted from a switch to wireless delivery of video and data instead of using fiber-optic cables, company officials said.
Connexion made the Inc magazine 500 in 2010 as one of the nation’s fastest growing company and the Inc 5000 list in 2011.
In the 2011 list, Connexion was reported to have $30 million in revenue for 2010 and a 263 percent rate of growth over three years. Its headcount stood at 612, nearly doubling from 314 over that three-year period.
