Final chapter in Lernout & Hauspie tale ends

Bankrupt speech recognition company Lernout & Hauspie has offloaded the majority of its assets to ScanSoft for $39.5m.

Lernout was valued at $9bn at the height of popularity but has been struggling to fend off bankruptcy for the past year. It has also had to deal with the high-profile prosecution of its founders for mismanagement of funds.

The proposed deal will come before the commercial court of Belgium and the US Bankruptcy Court for the District of Delaware on 4 December.

If the agreement receives the green light in the courts, digital imaging software ScanSoft will hand over $10m cash, a $3.5m note and 7.4 million share of stock - valued at $26m.

Mark Erwich, European marketing director at ScanSoft, estimated the technology will generate revenues in the region of $35m by the end of next year.

ScanSoft will inherit 150 Lernout & Hauspie staff as part of the deal. Erwich said the employees would be integrated into the ScanSoft organisation but would not rule out future redundancies.

Dragon Catalyst, headed by James Baker, the founder of Dragon Systems - the company that
launched Lernout's success, bought the audio search engine technology for $750,000.

Meanwhile, the company's automatic speech recognition technologies were sold to Multimodal Technologies for $2m.

The remaining assets were sold to Vantage Technology for $2m