Psystar has filed for Chapter 11 bankruptcy protection, the little company that sold cheap Mac clones piled up more than $250,000 in debt, owed mostly to shipping companies, the IRS, and law firm Carr & Farrell. In the filing, Psystar claims the poor economy is to blame for its financial mess, the company pins its problems on poor consumer spending, a lack of credit and financial problems at its vendors. Apple's copyright infringement suit against Psystar has been put on hold until the Chapter 11 filing is sorted out.
"Debtor sales have been greatly affected by the decrease in consumer spending. The financial crisis has also caused creditors to tighten up their terms and become more demanding for immediate payment," the company said in a court document.
Psystar also blames its partner vendors' own financial problems, which resulted in Psystar having to pay higher prices on parts. At that point, Psystar was unable "to turn a significant profit in each sale."