Psystar bankruptcy dismissal sets stage for Apple suit

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As promised, knock-off Mac creator Psystar has emerged from Chapter 11 bankruptcy, but the judge who granted the order has also taken steps to ensure the Florida company won't use the same route to fend off Apple.

The new ruling, as reported by The Mac Observer, ensures that Psystar will not be able to file for Chapter 11 bankruptcy for six months, and will not be able to file for Chapter 7 bankruptcy to avoid its lawsuit with Apple in California. Chapter 11 bankruptcy in the U.S. grants a company the ability to reorganize, while Chapter 7, also known as "straight bankruptcy," is when the business is dissolved and its assets are liquidated.

Psystar's Chapter 11 filing was dismissed in a Florida court, enabling the company to come back and sell new products, as it previously said it would. Last month, the company promised it would marry Mac OS X with Intel's Nehalem Xeon chips to yield the company's "fastest and most quiet computing configuration" yet.

The Doral, Fla.-based solutions provider also used the same e-mail to inform those following its legal proceedings with Apple that its decision to file for Chapter 11 in May was "critical" to maintaining its daily operations, but that the company now sees itself "ready to emerge" from bankruptcy and "again battle Goliath."

Translating the legal-ese of the latest twist in the ongoing Psystar saga, The Unofficial Apple Weblog summarizes the judge's ruling as follows: "Hey, Psystar! You can't use bankruptcy to weasel out of Apple's case against you."

Apple has a lawsuit against Psystar scheduled to start on January 11, 2010. When the company first filed for bankruptcy, the case was put on hold, until Apple had a stay on the case dismissed. Weeks ago, the clone-Mac-maker brought on a new legal team to continue its efforts.

Psystar was forced to file for bankruptcy protection thanks, in part, to its legal bills. The Mac Observer reports that the company owed its former legal team over $88,000.

Last week, Apple sent lawyers to Psystar's Florida headquarters for discovery in the upcoming case in 2010. Calling the event a "circus," the company's official blog invited supporters to attend and show their support.

"They will observe the building process from start to finish, including the installation of OS X on our machines," the company said of Apple's legal team. "We believe the only thing they will discover is what we have been open about from the start, and of course the scorching Florida heat."