A Sale In Germany May Stall U.S. Work
A Commodore Trademark Was Sold That Could Hurt Efforts To Sell The Firm's Assets
By Dan Stets, Staff Writer
Inquirer
March 09, 1995
NEW YORK — The bankruptcy trustee of Commodore International's German subsidiary has independently sold off a key company trademark, potentially undermining efforts to sell all of the company's assets and get Commodore computers back into production.
Trustee Bernard Hembach of Frankfurt sold the Commodore logo to Escom Aktiengesellschaft, a German computer company, last month for $1.4 million in apparent defiance of the U.S. Bankruptcy Court in New York, which tried to block the sale with a temporary restraining order.
The action is another setback to efforts by liquidators of Commodore's parent corporation and the company's American creditors to resolve the complex liquidation.
Sale of the company's technology will be delayed at least for several more weeks, postponing any restart of production of Commodore's Amiga and other computer products.
Franklyn Wilson, one of two Bahamian liquidators responsible for selling the assets of Commodore's parent company, is afraid that the German sale might make it impossible to sell the company's technology to another buyer.
U.S. Bankruptcy Judge James L. Garrity Jr. conducted a hearing here yesterday on whether Hembach and Commodore's German subsidiary, Commodore Bueromaschinen GmbH, should be held in civil contempt for selling the logo.
Garrity postponed a decision until March 20 to give Hembach time to reply to allegations brought by Wilson's attorneys, who say Hembach rushed the sale to duck a pending restraining order.
The judge is weighing whether to fine Hembach and the German subsidiary $5,000 each per day until the sale to Escom is reversed. Under the proposed order before the judge, Commodore's parent company would get the money.
Hembach says the American court had no jurisdiction to block the sale, arguing that the logo was owned by the subsidiary, not the parent company. Hembach sold to Escom a logo that includes the word Commodore and the "C=:" trademark. Wilson says all trademarks belonged to the parent company.
Commodore International filed for voluntary liquidation in the Bahamas in May. The company was based in the Bahamas and had its North American headquarters in West Chester.
Hembach sold the Commodore trademark to Escom on Feb. 16, the same day Garrity issued a temporary restraining order against the sale.
Wilson's attorneys say they notified Hembach on Feb. 15 that a motion for the restraining order had been filed in the New York court. According to Wilson, Hembach and Escom executives worked all through the night of Feb. 15 to conclude the sale by the morning of Feb. 16.
Wilson did not learn of the sale until March 1, when he met in New York with Escom representatives to discuss sale of all Commodore assets to the company, which is one of three active suitors for Commodore's remains.
Wilson had hoped to complete a tentative sale of Commodore's technology to Escom last week and then allow others to try to outbid the company at an auction expected to take place in a few weeks.
However, Wilson now contends that at least one potential bidder said he would drop out if the Commodore trademark in Germany was not up for sale. Germany accounted for 32 percent of Commodore's sales in 1992.