CardSystems Solutions had previously filed for Chapter 7 liquidation has changed its filing status to Chapter 11 bankruptcy. The Atlanta-based credit card processor filed the change to its bankruptcy filing status and reorganization in Tucson, deciding to make yet another change after it couldn’t get confirmation from its previous four reorganization plans.
Originally, the company filed a bankruptcy petition that listed their total assets at $13.1 million and total debts of $23.9 million. In 2005, the company sold most of its assets in response to the financial blow they suffered after a hacking attack. At that time, the hacker broke into the company’s computer system and downloaded the information of approximately 40 million customers.
The company was able to settle the complaint that’d been filed by the Federal Trade Commission after the incident took place. Nonetheless, the company, which previously employed over 100 people at its Tucson service center, hasn’t been able to recover.
It’s always sad to me when a company falls apart and runs into troubles like CardSystems Solutions has encountered. At the same time, I’m sure that a check into their system will reveal that their security systems were not up to date and did not abide by PCI regulations. This is just one more shining example of how an ounce of prevention is worth a pound of cure.