Pleo, a robotic dinosaur with many of the same characteristics as a household pet, was introduced to the Treasure Valley two years ago with a lot of hoopla and exuberant predictions for the toy's future.

On Friday, that future was put in doubt when Pleo's creator, Eagle-based Ugobe, laid off its 20 employees and filed for Chapter 7 bankruptcy, which means all the company's assets -- including the right to make Pleo -- will be sold off.

It also will mean the loss of the so-called poster child for the Eagle-Star Technology Corridor, a group of more than 100 area businesses and local and state government officials that had hoped to use Ugobe to attract technology businesses to the Eagle/Star area.

Ugobe CEO Caleb Chung said the company was a victim of the worldwide credit squeeze. Customers who had placed Christmas-season orders for the toy discovered that banks would not lend them the money to pay for the orders.

"We were selling them," Chung said. "But they were sitting in crates in Europe, Australia, Asia, Russia and the Middle East."

In its bankruptcy filing, Ugobe reported assets of $1.6 million, including $1.5 million in machinery to make Pleo in Hong Kong, and liabilities of $3.6 million.

Chung is among the company's creditors. Ugobe's bankruptcy filing indicated he is owed $353,500 in unpaid royalties.

Signs of strain emerged late last year. The entire board of directors stepped down before Christmas. CEO Liz Gasper left in January as cuts were being made in the marketing and public relations departments, and the company tried to negotiate new sources of capital.

Chung said Ugobe explored a possible sale or merger with a larger company, but in the end "there was a lot of nervousness in the market."

He speculated that the interest demonstrated by companies wanting to buy or merge with Ugobe indicate that some well-known names in the toy business will be on hand when the Bankruptcy Court puts the intellectual property rights to Pleo up for bid.

"I expect to be surprised," Chung said. "I think there will be people there (bidding) that I didn't even know were interested. And I don't think it will be just toy companies, because robotics are the next PCs.

"You would think they would want to ask us a question, or two," Chung said.

Whether or not Pleo's new owners ask for his help, Chung is the new director of the ArtsWest School for the Performing and Visual Arts in Eagle and plans to devote the bulk of his time to running the school.

The demise of Ugobe will not affect ESTech's efforts to recruit high-tech companies from high-cost states such as California to about 79,000 acres surrounding Eagle and Star, according to Lloyd Mahaffey, the group's chairman.

Originally, the plan was to use Ugobe, which decided last year to relocate from Emeryville, Calif., to Eagle, as an example of a company that found the Treasure Valley a business-friendly place.

Mahaffey said there were no indications that Ugobe was in financial trouble when it announced its relocation plans.

"We were told that it was a consolidation exercise, and the fact that its research and development was here was the swing vote," Mahaffey said.

Mahaffey said rumors had been circulating since late 2008 that Ugobe's European and Asian market customers had begun canceling orders as the economic downturn in the United States began to spread worldwide.

That was bad news for the company, because only 10 percent of its sales were in the United States, Chung said.

"The reality is that a small company relies on its key customers to place key orders in order to build market momentum," he said. "Ugobe is just like a lot of companies that got caught in an economic crossfire."

While "obviously disappointed" at Ugobe's demise, Mahaffey said ESTech members will begin recruitment trips to California next week. Mahaffey plans to use long-time friendships to promote ESTech.

But attracting out-of-state companies has never been ESTech's sole mission, said Teri Bath, president of the Eagle Chamber of Commerce.

"Not all of our inquiries have been from California or Washington state. A lot of them have been from small Treasure Valley companies," Bath said.

Joe Estrella: 377-6465