3DFX INTERACTIVE, INC.

Case Highlights

• Complex graphic-chip manufacturer with intricate intellectual property issues
• Successfully analyzed case, brought causes of action and lent structure to wind down and payout to creditors

Case Narrative

3dfx Interactive produced state-of-the-art computer graphic chips for use in video games and personal computers.  The debtor attempted to sell substantially all of its business to its primary competitor, who the debtor had sued in a variety of patent infringement actions. The nature of the transaction was to eliminate the debtor’s debt and provide debtor’s equity with either a cash dividend or equity in the acquiring entity.  This complex transaction was entered into but failed to occur as envisioned by the parties.  Disputes arose and litigation ensued, eventually pushing 3dfx into Chapter 11 and leading to the appointment of Bill Brandt as Trustee.  The Trustee and DSI investigated the facts and circumstances surrounding the debtor’s demise and determined that the estate had causes of action against the debtor’s former officers, directors, professionals and the acquiring party. The disposition of intellectual property, patents and technological know-how 3dfx possessed became seminal issues with respect to the handling of the case and the patent litigation that existed at the time the transaction was resolved.