farmer@houligan.UUCP (Bullwinkle) (01/10/86)
Subject: Commodore in Chapter 11?
Newsgroups: net.micro.amiga
I have heard rumours that Commodore will file for Ch. 11 bankruptcy
within the next few months. (Chapter 11 is filing for a freeze of assets
and internal reorganization). I would appreciate any information which
any of you might come across.
Personally, I would like to buy an Amiga after some more research and
this is a looming question in my mind.
Also, please, no gloating from the ST gallery at this rumour.
Yup! Yup! Yup!
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Bullwinkle
...!ihnp4!pur-ee!csd-gould!houligan!farmer
/
...!gould9eve@ssc-bee.UUCP (Michael Eve) (01/14/86)
> I have heard rumours that Commodore will file for Ch. 11 bankruptcy > within the next few months. (Chapter 11 is filing for a freeze of assets > and internal reorganization). I would appreciate any information which > any of you might come across. What I have heard (and I'm sure someone will correct me if I'm wrong(: Commodore failed to make a payment to its creditors in September or October, 1985. At that time, the loan was considered in default, and the bankers stepped in to help manage (and are continuing to do so) the company. At ANY TIME, the bankers can now call in the balance of the debt and force Commodore into bankruptcy proceedings (since Commodore missed one payment, the whole balance is callable). Now the bankers don't want to kill a company that has a reasonable chance of making restitution so they are waiting to assess the current strength of Commodore's offerings in the market. The results of the Christmas selling season will probably way heavily upon any decision they make so we may hear soon. Also, according to The DTACK junkmail flyer, Commodore may be hit for millions of back taxes from various governments. The bankers will have to cough up cash to pay these taxes if Commodore is to keep running. Obviously, they don't want to throw good money after bad, so if Commodore isn't making a profit, bye bye. Many rumors have circulated that Commodore is trying to sell the Amiga division.This may keep the Amiga going even if Commodore later goes under. -- Mike Eve Boeing Aerospace, Seattle ...uw-beaver!ssc-vax!ssc-bee!eve
mckay@pur-ee.UUCP (Dwight D McKay) (01/15/86)
Last week's Wall Street Journal reported the sales of the Amiga were, "at the low end" of Commodore's predictions. They did NOT mention anything about Chapter 11 proceedings but did stay that several of the loans Commodore has from banks will expire the end of January... --Dwight Mckay, ECN Software Support [mckay@purdue-ecn]
doug@terak.UUCP (Doug Pardee) (01/17/86)
> Now the bankers don't want to kill a company that has a reasonable chance of > making restitution... Seems reasonable, right? Well, we at Terak found out that you can't depend on bankers being reasonable. Our banker (the Bank of Boston) forced us to seek refuge in Chapter 11 last year even though it was not at all to their advantage (and it certainly wasn't to *our* advantage!) Our operating credit line was a demand line, secured by accounts receivable. At the time they pulled the plug, the receivables were worth about $1.5 million face value, our credit limit was about $800,000, and we had exercised only about $450,000 of that. We had about $250,000 in our checking account at the Bank of Boston. We had just reported our most profitable quarter in a number of years, and had a major new product line about ready for introduction. About two weeks after the Bank of Boston was caught laundering Mafia money, it notified us that it was exercising its option to demand immediate payment in full. This was obviously out of the question, and we counter-offered a pay-off over 3 months. They refused that, and we explained that since we couldn't possibly arrange a new credit line before the payment deadline, if they were to insist on immediate payment in full we would have no options except to file for protection. They not only insisted, they siezed our checking account (apparently a few days before they even notified us that they were going to). We filed for protection -- there was no choice. The judge ordered Bank of Boston to return our checking account, to accept a pay-off over ten months, and to relinquish their lien on our receivables. The moral is that the bank knew darn well that they'd be worse off if they forced us to seek refuge in Chapter 11, but did it anyway. A wheeler-dealer of my acquaintance tells me that it's not the first time he's heard of bankers operating irrationally. I hope Commodore fares better than we did. -- Doug Pardee -- CalComp -- {hardy,savax,seismo,decvax,ihnp4}!terak!doug