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Amiga Update (1994-07-21)
940721 The sale of C= {this line added when newsletter was archived.}
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// Amiga Update - News and Rumors //
\X/ (A Very Occasional Newsletter) \X/
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The following was obtained from the public download area of GEnie.
Brad
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Now Defunct-Commodore's Bahamian Creditors Gather to Do Battle By Dan Stets,
Philadelphia Inquirer
Knight-Ridder/Tribune Business News
NASSAU, Bahamas--Jul. 19--Le Meridien, a graceful resort hotel on fashionable
Cable Beach, hardly seems a spot for a fight. It is a place of manicured
lawns, swaying palms, sandy beaches and emerald water. Travelers normally
come here for the relaxing pleasures of the tropics and fine dining at the
hotel's gourmet restaurant.
But suddenly on Friday amidst the usual gathering of sun-tanned women in
bikinis and men in shorts appeared a small army of two dozen lawyers, mostly
men in dark suits bearing overstuffed briefcases.
They came to do battle over the carcass of Commodore International Ltd., the
once mighty maker of small computers which had its North American
headquarters in West Chester. They came for the first official meeting of
Commodore's Bahamian committee of creditors.
It is a fight over the company's assets, over the future of its technology,
over how much of its $145 million in debt will be paid and, not surprisingly
when lawyers get together, over legal jurdisdiction.
Commodore, whose stock was traded on the New York Stock Exchange until May 2,
was registered in the Bahamas, and the company initiated its own liquidation
in the Bahamian Supreme Court.
The court-appointed Bahamian liquidators so far have received at least four
proposals to buy Commodore, including one from the management team o its
subsidiary in the United Kingdom, the only one of the company's units still
profitable when the firm went out of business
The other suitors are Amstrad Plc., a U.K. computer firm; Philips Electronics
of the Netherlands, and Samsung Electronics of Korea.
But before there is a sale, lawyers for Commodore's principal creditors would
like to have the bankruptcy proceedings moved or at least have parallel
proceedings opened in the U.S. Bankruptcy Court in New York.
"The biggest problem we are having is that the Americans don't trust the
Bahamians to do the liquidation," said Paul L. Adderly, the attorney for the
two liquidators.
"What can you do about that?" asked Adderly in exasperation. "We are not
entirely ignorant of these matters in the Bahamas."
But lawyers for the main creditors see things differently. It is not just the
competence of the Bahamians they have called into question, but the efficacy
of Bahamian law.
Under Bahamian law, a creditors' committee has an advisory role, while under
U.S. law, the creditors would have more of a say over final disposition of
the assets.
Also, Bahamian law permits the liquidators to go back and judge, and possibly
reverse, management actions involving assets three months before bankruptcy
was declared. American law permits a year.
So far, the Bahamian court has rejected motions from the creditors to have
the proceedings moved to New York.
Meanwhile, the creditors are seeking a ruling in U.S. Bankruptcy Court in the
Southern District of New York to seize jurdisdiction or at least open
parallel proceedings.
The principal opposing creditors are Prudential Insurance Co. of America,
and a subsidiary, Pruco Life Insurance Co., both of Newark, N.J., which are
owed a total of $28 million; Anchor National Life Insurance Co. of Los
Angeles, owed $5 million, and Daewoo Telecom and Daewoo Corp. of Korea, owed
$15 million.
The creditors have questions about actions taken by the Commodore management
team shortly before and right after the liquidation filing in the Bahamas on
May 2.
They want to challenge management's transfer of a Commodore unit from one
subsidiary to another, and they have questions about the conduct of
Commodore's former president, Mehdi R. Ali.
Ali tried to get Prudential and Daewoo to agree to allow liquidation
proceedings to go unchallenged in the Bahamas in return for a vague promise
that they would get 50 cents on every dollar of debt.
According to an affidavit filed in the Bahamian Supreme Court by Stephen M.
Richmond, an attorney representing the creditors' committee, Ali claimed he
had a foreign buyer for the company and the sale would proceed quickly if
there was not a legal tangle in New York.
Richmond, a gruff Boston-based lawyer, said Ali refused to tell him who the
potential purchaser was or what the terms of the sale were.
Ali is no longer associated with Commodore. Reached Monday by telephone at
his home in Ridgefield, Conn., and asked for comment, Ali shouted, "You're
intruding on my home. I'll complain to your editor. You're an idiot." He then
hung up.
The Bahamian court-appointed liquidators are Franklyn Wilson and McGregor
Robertson, two partners in the Bahamian offices of Deloitte & Touche, a major
accounting firm.
Wilson said Monday he hoped to complete the sale of Commodore's assets "very
quickly," but he declined to be more specific.
Amid all the men in dark suits last week was a bearded, casually dressed
British national, David Pleasance, managing director of Commodore's U.K.
subsidiary and a leader of the management team trying to buy all of the
company.
"We might as well try. We have a good business in the U.K., a very good
business," said Pleasance, who came to the Bahamas to get to know the
company's major creditors.
If the management buyout is successful, Pleasance said operations would be
moved to England, but that the company would like to keep research and
development facilities in Norristown.
"These are very good people," Pleasance said. "We would like to keep them."
END!
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|| Brad Webb - available at:
// Commodore has fallen || webb@malamute.med.ge.com
\X/ and it can't get up || GEnie -- B.Webb
|| Portal -- Jumpdisk
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