Insolvent smart home company • The Register
Smartlabs, Inc, parent company of defunct Internet of Things provider Insteon, is unable to meet its financial obligations and has spun off its assets to a financial services company to be sold.
After recently shutting down the servers supporting its smart home hub app and not telling any of its customers or partners, the California-based company finally got down to publishing late Wednesday. an update to its website.
The notice explains that in 2017, Smartlabs experienced financial problems and obtained additional capital and new management to improve its situation. But the emergence of the global pandemic in 2020 and the resulting supply chain disruption proved too much, prompting the company to seek a buyer in November 2021.
“The process resulted in multiple interested parties and a sale was expected to be completed within the March time frame,” the company’s post read. “Unfortunately, this sale did not materialize. As a result, the company was outsourced to a financial services company in March to optimize the company’s assets.”
Smartlabs, Inc. a gave up his property to a company with a confusing name, SmartLabs (ABC), LLC. The renamed firm, managed by a person identified as David Miller, exists to liquidate the company’s assets and handle claims from creditors.
Smartlabs settled its insolvency through a general assignment for the benefit of creditors – reflected in the ABCs of the company’s new name. Available in select US states, this is an alternative to federal liquidation bankruptcy proceedingswhich involve a court, potentially significant costs and possible stigma.
Legal documents from that process noted, in March, that Smartlabs “is indebted to various creditors and is unable to pay all of its debts in full, and has decided to cease operations,” and has therefore transferred its assets so that the money owed can be refunded.
Former Smartlabs and Insteon CEO Rob Lilleness seems to fear his company’s failure will haunt him: He first changed his LinkedIn profile to omit any mention of Smartlabs or Insteon and reduce its display name to initials. Then, after the unexpected shutdown of Insteon’s servers was reported, his LinkedIn profile disappeared completely.
This prompted a visitor to Reddit’s /r/Insteon forum to post a screenshot of the company’s suddenly timid management. Insteon’s leadership-bios page at the time this story was filed it returned a “404 not found” error. Another forum visitor took the opportunity to acquire the domain Insteoff.com and fill it with a one-page website that makes closing the business more obvious.
Insteon’s farewell message acknowledges the “amazing following and community” that has grown around the company’s IoT products – a group that clearly resents being caught off guard by a March 22 deal 2022 and made public by a server shutdown only a few days ago. And he expresses the hope that a buyer can be found before concluding with a statement of regret.
“While incredibly difficult, we hope the Insteon community understands the tireless efforts of all employees to serve our customers and deeply apologizes to the community,” the post read.
There could, however, be a happy ending. In a publication at the forum of Universal Devices – maker of an Insteon-compatible home automation controller – Michel Kohanim, CEO of Universal Devices, said he was in communication with the insolvency company and may pursue the purchase of a license for technology from Insteon or what remains of the company. Insteon, he said, has about 100,000 hub users. Some of them would presumably welcome new management.
Kohanim said he couldn’t go into more detail at this time due to a nondisclosure agreement.
Meanwhile, Insteon system status page continues to show that all is well. ®