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Dear Friend of Loki:
As you may know, on August 3, 2001, Loki filed a Chapter 11
reorganization. As our valued customer, we wanted to let you know why we
have elected to reorganize and how, if at all, it will impact our ongoing
business.
Under US law there are two kinds of bankruptcy:
1) Chapter 7 is a liquidation. We have not filed a Chapter 7 and have no
intention of doing so.
2) Chapter 11 is a reorganization. This will allow us to deal with our
creditors fairly and equitably and at the same time continue to operate
the company. We are still shipping products and porting new games and
expect to be doing so for a long, long time.
Most of the debts we are restructuring through the Chapter 11 are well
over a year old. They represent mistakes made by a young company. We've
learned from our mistakes and become cash positive. Going forward we have
every confidence that Loki will continue to be successful and grow.
We cannot say for certain how long Loki will remain in Chapter 11. It
depends on many factors. However we do intend to bring the process to a
conclusion as quickly as possible. Once our plan of reorganization is
accepted by the court, our creditors will receive an agreed upon
settlement and all other prepetition obligations will be fully and
finally discharged.
During and after the reorganization your orders will continue to be
honored. We will continue to provide end user support, bug fixes and new
products. Negotiations are in progress to guarantee Loki a steady stream
of additional AAA games to bring to Linux.
Most importantly, we'd like to thank each of you for your support over
the years. Without our customers, we are nothing. The outpouring of
support we have received in the last few days has been overwhelming, and
we will continue to do everything we can to merit that support.
Kind regards,
Scott Draeker
President, Loki Software