VIScorp Contract for Amiga Assets Was Canceled, Attorney Says
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Chicago, Nov. 27 (Bloomberg) - Visual Information Services Corp.'s contract to acquire the assets of Germany's Amiga Technologies GmbH from bankrupt personal computer maker Escom AG was canceled after Viscorp failed to pay the agreed $20 million, a lawyer for Escom's bankruptcy trustee said.
"They didn't pay the money they were supposed to pay and as a result the contract was canceled in early October," said David Robinson, the lawyer.
The Chicago-based interactive television development company was banking on Amiga's technology to give it an edge in the race to develop the first interactive set-top box for consumers.
Without the technology, a "significant" portion of 6-year-old Viscorp's business could be damaged, the company's chief operating officer, Hugh Jencks, said last week.
Right now, Viscorp has access to Amiga's operating system through a licensing agreement signed in January. If it fails to acquire Amiga's assets, that license will be canceled, Robinson said.
That would put further pressure on Viscorp, which is already struggling. In an Oct. 29 filing with the Securities and Exchange Commission, Viscorp conceded that it, "cannot currently generate sufficient revenues and cash flow from operations to meet its business obligations."
Viscorp Chairman Jerome Greenberg declined to say how much money the company needs or how urgently.
"We have funding in process but I can't tell you any more than that," he said.
Greenberg said that the contract for Amiga "expired" because Viscorp did not believe the assets justified the price.
Meanwhile, Hembach has re-opened bidding for Amiga with "several" un-named companies and expects to sign with one of them within a few weeks, Robinson said.
Last week, Jencks, without revealing that the original contract had fallen apart, said Viscorp was still a front-runner in the negotiations.
Robinson said Viscorp is not the leading candidate, though it's not necessarily out of running.
"If they came in here tomorrow with a check in the right amount they'd be in the running," he said.
Viscorp maintains that even if it doesn't acquire Amiga's assets, the new owners would probably re-license the technology to Viscorp.
The company hopes to introduce its ED box by the end of the year. The box connects to a television and telephone line and enables consumers to receive fax and phone calls, play video games, rent movies, receive electronic mail and access online services, including the Internet, using a TV remote control.
Viscorp had originally offered $40 million to acquire the whole of Amiga. When Escom declared bankruptcy July 15, Viscorp agreed to pay $20 million for certain key assets instead.
Viscorp's shares fell 1/2 to 2 7/8.
-- Toni Clarke in the Chicago newsroom (312) 322-7298 / krm