4/21/95 From Usenet

I attended the Commodore assets purchase hearing this morning in the Old
Courthouse Bankruptcy court in Manhattan, NY.

I was in a hurry to get there, so I'd forgotten my notebook, and don't have
any names to mention.  I stayed until the court recess at 12:00pm (to be
adjourned at 2:00pm), and had to leave to come back to work. However, I am
able to positively report the following data:

NOTE: I wish to make it perfectly clear that this information is presented
to the best of my own understanding of the proceedings, and I claim no
factual guarantee of this information.

- Yesterday afternoon (4/20), the only legally valid offer for Commodore's
  assets Escom.

- It seemed very evident during the proceedings that the only other party
  seriously interested in the purchase of Commodore's assets was Dell
  Computers.

- Early in the proceedings, a member of the creditors' legal counsel
  passionately made a motion to the court to nullify Escom's purchase
  offer, based mainly, but not entirely on the following:

  - It was established by a liquidator representative that the
    Commodore assets consist of:

     1. Patents, trademarks, and intellectual property.

     2. What the liquidation representative referred to
        simply as "other assets".

  - Escom's offer was $3.5 million for 1. and $1.5 million for 2.,
    for a total of $5 million.

  - Dell has submitted a clearly documented offer to purchase 1. for
    $13 million, and 2. for $2 million, for a total of $15 million.

  - A key stipulation in Dell's offer is that $1 million of it has
    already been put up as a non-refundable deposit, which Dell must
    forfeit if it has not completed the purchase of Commodore assets
    within 30 days.

  - It is presumed that the Creditors want to nullify Escom's deal
    in favor of Dell's deal almost entirely because it's a much higher
    sale price.

Escom's legal representative, which during my attendance was the only
advocate for Escom's offer (vs. the handful of Creditor/Dell
representatives and attendees) fought for Escom's purchase based mainly on
(but not entirely)

  - the basis that Escom's offer was validated already after 8
    months of structuring the details, while Dell came in very late
    in the game, and therefore having little grounds for opposing
    Escom's offer.

  - if Escom's offer is nullified or postponed, there will have
    been no real "order" to these proceedings; the representative
    made this point by asking the court "How do we know when the
    hammer falls to confirm an offer?" implying that theoretically
    the proceedings could go on forever if a valid offer is present,
    but not accepted.

The Escom counselor pushed to have the proceedings finalized today
(4/21) because representatives for Escom that were present were going
to return to Germany by the end of the weekend.

By recess time, the judge had been presented with (from the liquidator
representative) a list of undisputed facts pertaining to the proceedings
details thus far.  At this point (noontime), he will have to make one of
two choices by the end of the day:

  1. Approve and finalize Escom's purchase.

  2. Continue the auction, accepting Dell's non-refundable deposit of
     $1 million, allowing Escom (and technically any other interested
     party) to make a counter bid if they wish.

Since I know little about the bankruptcy and legal system, I really
couldn't say which looks more likely.

Also, since I personally am interested only in what the purchaser plans to
do with the assets after the purchase, I don't yet side with either party,
although (I believe) that Dell has much more capital to work with.

I asked a Dell legal counselor what Dell plans to do with the Commodore
product line, and she responded with "I have no idea."

Can anyone give info on this?

-Joe Thomas

BTW- Check out "Fitter 2.0" very soon on Aminet ;)

--
    -Joe