CEO of bankrupt Linux company says employee lawsuits put it out of business
Mandriva offered a Linux operating system for PCs that was doing well in some developing nations.
We reached out to the former CEO of Mandriva Jean-Manuel Croset, who joined Mandriva in 2011, to ask what happened.
His side of the story: the company was finally at a tipping point of being profitable when employee lawsuits forced it into bankruptcy.
The company had generated a mere €553,000 in revenue in 2013, with revenue falling for years, according to a notice posted by the company. Croset confirmed that to Business Insider. That wasn't enough revenue, so he had to dismiss some people, particularly sales staff.
In 2014 revenues were climbing again, up by 40%, he told us. Costs were down by 60%. The company wasn't yet profitable, but it had just broken even. Croset - who is Swiss, not French - blames the legal system in France for Mandriva's ultimate demise.
That's because the laid-off workers sued the company and won, just as he says Mandriva was breaking even. (The details of the suits, including names of employees involved, are confidential, he told us, and he declined to offer details.)
The company was ordered to pay these employees hundreds of thousands of euros, and ordered to pay "provisory execution," meaning immediately, even though the appeals process was not complete, Croset tells us.
This wasn't the first time Mandriva struggled to make ends meet. It had some epic troubles in 2010, right before Croset joined, that resulted in layoffs and the exit of its founder.
After so many years of struggle, the shareholders didn't want to put up more money to save Mandriva, and the company was forced into bankruptcy,
Here's the note we received from Croset telling us his take on the situation.
Mandriva SA went out of business following a few court decisions upon action of former employees, who had been dismissed as a part of the restructuring process in 2013. As the labour laws are very generous towards the employees in France, those court decisions forced the company to announce bankruptcy, as the cash available was not sufficient to cover the amounts due and the shareholders did not want to cover them.
It's quite a shame, as the company was recovering and the operational results were almost balanced for the year 2014, for the first time since 2005, with an increase of the sales by 40% and a reduction of the costs of over 60%.
But Mandriva was walking on thin ice, too thin to absorb those exceptional issues; the situation would have been different with a little bit of comprehension from the French authorities (by according delays of payment or installments, for instance), but this was not granted, despite all our requests. Thus, the only possible outcome was the one we all know now.
I'm sad that Mandriva died in such a way.
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