Sonic pauses Replay deal

Assets will now be auctioned off

Bankrupt Sonicblue said it could not complete a key deal, ending negotiations to sell its ReplayTV and Rio product lines to audio equipment maker D&M Holdings for up to $40 million.

In late March, Sonicblue filed for Chapter 11 bankruptcy and announced plans sell off three of its consumer-electronics lines to two companies.

The biggest part of the sell-off involved the deal with D&M, the Japanese holding company that owns stereo makers Denon and Marantz, to take over the controversial ReplayTV digital videorecorders and Rio digital audio devices.

Sonicblue management had hoped to sell the two units to D&M for up to $40 million, minus up to $5 million in some assumed liabilities. With the deal’s collapse, the assets will be auctioned off through bankruptcy court proceedings in San Jose, Calif.

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