Com21 Inc. 's plan to emerge from bankruptcy with a new focus on digital video products came to a screeching halt when creditors opposed the idea. Com21 has instead initiated the complete shutdown of operations and a liquidation of its remaining assets.

Com21, which filed for Chapter 11 in July, originally wanted to use proceeds from several asset sales to fund a restructuring plan centering on a suite of digital video products that included the "GigaQAM," a video synthesizer with 64/256 QAM modulation.

This summer, Arris struck a deal to purchase Com21's cable modem termination system assets and its Ireland-based R&D subsidiary for about $2.8 million. As part of the deal, Arris retained about 45 Com21 employees. Taiwanese consumer electronics firm CastleNet Technology followed with a deal to license Com21's DOCSIS and EuroDOCSIS cable modem technology for undisclosed financial terms.

In a press release issued Thursday, Com21 said a San Jose bankruptcy court had also proposed the liquidation sale of its remaining assets and "miscellaneous personal property assets." They include Com21's video product assets, DOCSIS modem test equipment and proprietary ATM-based modem inventory. Com21 officials did not name those proposed buyers in the release, and additional details were not made available by the Friday deadline for CED Broadband Direct.

Com21 said the remaining liquidation sales would not be enough to pay about $25 million in creditor claims that remain outstanding.

Following the decision by creditors not to pursue Com21's proposed reorganization plans, the company terminated "substantially" all of its employees on Aug. 31. Com21 said it expects to "surrender its remaining premises" sometime today.

Before succumbing to paper-thin margins and a highly-competitive, but consolidating, sector of modem and CMTS vendors, Com21 managed to ship more than 2 million cable modems and over 2,000 headend controllers.