Kids’ Tablet Maker Fuhu Files for Bankruptcy Amid Sale to Mattel

EL SEGUNDO: Fuhu, the creator of the nabi tablet for kids, has filed for Chapter 11 bankruptcy protection, ahead of a possible sale to Mattel.

Fuhu has agreed on the principal terms of a sale to Mattel, and in order to proceed with the transaction, has started voluntary proceedings under Chapter 11 in the U.S. Bankruptcy Court of Delaware. Under terms of the deal reached with Mattel, the acquisition would occur through a sale process supervised by and subject to the approval of the Bankruptcy Court, in which Mattel would be a "stalking horse" bidder for the company's assets. During this time, other potential buyers will have the opportunity to present competing offers.

"We expect to be able to satisfy ongoing obligations to customers, vendors and employees pending the sale and ensure the bright future of the nabi franchise with the proposed acquisition and with the protections afforded by the Bankruptcy Code," said Jim Mitchell, the CEO of Fuhu. "Most importantly, we expect to continue to ship our award-winning nabi products to our customers, provide support and troubleshooting to our customers, honor existing nabi Shop gift cards, and continue to develop our award-winning software, including nabi Pass, the kid-safe app and content subscription service."