The long-delayed sale of the remaining assets of Commodore International Ltd. has been put off once again

The delay is raising concerns among users and supporters about whether Commodore technology has a future

By Dan Stets, Staff Writer
Inquirer

November 07, 1994

While other computer companies are racing to make advances on the information highway, Commodore's flagship Amiga computer seems stuck in a road-side ditch.

The situation is particularly poignant for Amiga users - and they are an ardent group - because the computer once was the leader in the multimedia technology now being emulated by Apple and by makers of IBM-compatible computers.

The latest disappointment for Amigans came Friday, when the liquidator of Commodore's assets failed to sign an agreement with the apparent buyer, a management team from Commodore's United Kingdom subsidiary.

"Regretfully, we have had some delay, and what we hoped to happen today is not likely to happen," Franklyn Wilson, the chief liquidator of Commodore's assets, said Friday.

"I can't get any more specific than that," he said. "We hope to get it done very shortly," he added, echoing a refrain he has used since mid-July.

Commodore, which based its North American operations in West Chester, was incorporated in the Bahamas, where it filed for liquidation in early May.

Wilson had hoped to present the Bahamian Supreme Court, which is supervising the liquidation, a signed agreement with the U.K. subsidiary by Friday.

The U.K. team and the liquidator supposedly came to terms early last month, and only a few details remained to be worked out by the lawyers for the two sides.

"It's a big deal, it's a complex deal," said Colin Proudfoot, a managing director of the U.K. subsidiary and a leader of the buyout effort.

"I think it will be resolved in a matter of weeks, but I've been saying that since April," he admitted. Commodore announced its intention to liquidate in April.

The U.K. team's chief competitor, Creative Equipment International, of Miami, now may be the initial winner of the competition.

Alex Amor, president of Creative Equipment, said Wilson is flying from the Bahamas to meet with him today to discuss details of a possible agreement. He said Creative may sign an agreement to purchase Commodore's assets as early as this week.

"We don't feel we are too far off-center right now," said Amor. "If we can get a few points negotiated, I think we can move forward on it."

But even if Amor is able to sign a deal this week, the process is far from over.

Once an agreement is signed, the liquidator will present the deal to the Bahamian Supreme Court. The court then intends to let other suitors attempt to outbid the apparent winner.

Presuming Creative Equipment signs the deal, among those invited to bid would be Commodore U.K., as well as others which have expressed interest, including Samsung Electronics, of Korea; Philips Electronics, of the Netherlands; Amstrad PLC, of the United Kingdom; and Escom AG, of Germany.

It is not yet clear how long that procedure would take, although the liquidator has promised it would be as soon as possible after the first deal is signed.

The unusual bidding procedure was designed to assuage Commodore's American creditors, who wanted the bankruptcy proceeding conducted in the U.S. Bankruptcy Court in New York.

The liquidator is trying to assure the creditors that he got the highest price possible and to dissuade them from trying to block a sale in the New York court.

Amor maintains that Creative Equipment was always the highest bidder, but that he held back to allow the U.K. group to sign an agreement. He then could have seen their terms and outbid them before the court.

That strategy changed last Monday, however, when the liquidator sent Creative Equipment a 97-page sales contract for Commodore.

The liquidator requested that Creative sign the deal by last Wednesday, but Amor said he was not prepared to act quite that quickly.

He also expressed frustration that the process had taken so long.

"I think as every week passes, the value of the company goes down," said Amor. "The sad part is that people are forgetting about Amiga."

At this point, it is not entirely clear why the procedure has taken so long.

David Pleasance, another managing director of the U.K. team, has one possible explanation: Commodore's assets were so spread out among subsidiaries around the world that it has taken the liquidator months to figure out what is available for sale.

But the U.K. team offered no explanation as to why it had not been able to finalize the deal.

Meanwhile, those who know and love the Amiga have been suffering.

"We think the Amiga market is deteriorating very rapidly," said Larry Bennett, an owner of Expert Services Inc., an Amiga dealer in Florence, Ky.

"We think, in another month, there is not going to be any market at all because everyone is going to dump their Amigas," he said.

If something isn't resolved this month, Expert Services is going to stop selling Amigas, he said.

Wayne Steele of Advanced Computers Inc., in Jackson, Wyo., another Amiga dealer, said the delays are killing the Amiga.

"It eventually will come to the point where it doesn't matter who signs the agreement. There won't be anything left for them to do," Steele said.

Thomas Hillman, executive vice president of Scala Inc., said his software company has already begun to work on software using IBM-compatible personal computers. It had been dedicated to software for Amigas.

He predicted that Commodore's whole distribution network will evaporate by early next year unless there are new products. His company and others will be sorry to see the Amiga disappear, he said.

"It had a very elegant technology and architecture," Hillman said.