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Children's technology company files for Chapter 11 protection

Children are increasingly tech savvy. Adept at navigating smart phones and tablets, some parents may be amazed by how quickly children catch on to new technology. Florida parents may be interested to learn that a technology company that produces products specifically for children has recently filed for bankruptcy protection, despite the popularity of their products.

Fuhu Inc., producer of colorful Nabi brand children's tablets, filed for Chapter 11 bankruptcy recently. The tablets Fuhu specializes in are designed specifically for use by children as they learn how to navigate online entertainment options. Fuhu has sold over four million of the Nabi tablets. They sell them through numerous retailers, including Costco, Best Buy, Target, Toys R' Us and Wal-Mart.

Fuhu experienced a less than optimal holiday shopping season in 2014 following the late delivery of its tablets that year by Foxconn Technology Group, one of Fuhu's contract manufacturers. Prior to that, however, the company had been experiencing significant growth. Identified as the fastest-growing private company in America in both 2013 and 2014 by Inc. Magazine, they were also named the most promising company in America by Forbes Magazine in 2014. In 2013, they had revenue of more than $195 million.

The company's bankruptcy filing contains a pending deal for the company to be acquired by Mattel Inc. for $9.5 million, though whether Mattel Inc. or a higher bidder acquires the company, remains to be seen. A bankruptcy judge will have the authority to allow the tentative deal to proceed. As part of the pending deal, Mattel lent Fuhu money to finance the bankruptcy proceeding.

This business bankruptcy filing may be a smart move for Fuhu in the long term. If Fuhu is acquired by Mattel, Inc. or another company, its tablets may be able to continue to land in children's hands this holiday season and beyond.

Source: The Wall Street Journal, "Fuhu Files for Bankruptcy Amid Fight with Foxconn," Peg Brickley, Dec. 7, 2015

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