Interex seeks bankruptcy protection after shutdown

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August 22, 2005 (Computerworld) -- After abruptly pulling the plug on its operations in July, the Interex user group this month filed for bankruptcy protection, citing plummeting revenue and increasing debt.

The Sunnyvale, Calif.-based organization for users of Hewlett-Packard Co.'s systems reported total liabilities of just over $4 million, in documents filed at the U.S. Bankruptcy Court for the Northern District of California in San Jose.

Interex shut down last month and canceled its HP World conference, which was due to be held last week in San Francisco . The user group, which claimed to have about 100,000 members, offered no explanation for the closure beyond a statement that it was "financially necessary." Interex board members contacted by Computerworld have declined to discuss the events that led to the shutdown.

But the Chapter 7 bankruptcy petition that was filed Aug. 11 provides some insights.

In 2003, Interex brought in nearly $8 million from its conferences, publications and membership fees, according to the court papers. Last year, when HP announced that it would hold its own user conference starting this September, Interex's revenue fell to $6.4 million—a 20% decline.

From Jan. 1 to Aug. 8 of this year, the user group recorded just $713,409 in revenue, the bankruptcy filing said.

HP World was its chief source of revenue, but Interex faced a decline in trade-show bookings. Sources blamed competition from HP's upcoming conference and a general decline in interest among IT vendors in exhibiting at user conferences .

The court filing shows that Ronald Evans, the user group's executive director, was paid $214,676 from August 2004 through the end of last month, including a payment of $43,746 that was made in July. However, his biweekly salary dropped from $8,925 to $7,140 in the first five pay periods of that time frame.

The final payment to Evans may have been required under the terms of his contract or as part of a severance deal, said one source. In addition, the user group still owes Evans $8,255.80, according to the bankruptcy filing.

Four Interex board members last week either didn't return calls, wouldn't comment on any issues or said they could not discuss matters relating to the bankruptcy because of the ongoing court proceedings.

Evans couldn't be reached by phone, and an e-mail that was forwarded to him by an Interex board member didn't draw a response.

Future in Doubt

As far as the future of Interex is concerned, Denys Beauchemin, an IT consultant who is the user group's vice chairman, said he doubts that any new organization will emerge from its ashes.

"HP wants to control everything, and there is no room for Interex or anything like that," Beauchemin said.

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