Zenith Infotech must sell its cloud business to pay debt holders, according to a court order. But CEO Akash Saraf apparently will battle the court order.
Bombay High Court has ordered Zenith Infotech to sell its cloud business in order to repay debt holders that suffered from the company's 2011 bond default, according to Business Standard. CEO Akash Saraf apparently plans to appeal the court order, which arrived around the time that Zenith Infotech implemented layoffs in recent days.
The story starts in September 2011, when Zenith Infotech sold off its MSP-focused RMM (remote monitoring and management) and NOC (network operations center) business. Around the same time, Zenith Infotech defaulted on a bond payment -- raising concerns among MSPs (managed services providers) that leverage the company's cloud-oriented backup and disaster recovery (BDR) services.
Debt holders and Zenith Infotech have been locked in a court battle for more than two years. At the same time, the company attempted to build out a private cloud offering for MSPs.
Fast forward to the present and the situation sounds bleak. Zenith Infotech had significant layoffs last week, MSPmentor reported. The company has not replied to multiple requests for comment.
Now, Bombay High Court is ordering Zenith Infotech to sell off its cloud business -- essentially, the company's core busines -- by April 16, 2014, according to Business Standard. CEO Afash Saraf told the Standard that the company will appeal the ruling. In the meantime, it's unclear how many employees remain at the company.