Liquidation of Waybern Corp. Perils Datatron
Waybern Corp., a desk-top computer distributor that claims to be another victim of International Business Machines Corp.’s foray into the personal computer market, filed for liquidation Thursday under Chapter 7 of the federal bankruptcy code.
The Garden Grove company is the subsidiary and key revenue source of Datatron Inc., an electronics company in Tustin. Sources close to the companies say Waybern’s failure makes the future of Datatron “uncertain.” Datatron employs 30 workers.
Waybern, which filed in Santa Ana bankruptcy court, had been acquired by Datatron just 18 months ago in a non-cash agreement that requires Datatron to pay $750,000 by August to Waybern’s four original owners. Datatron said it will meet that obligation even though Waybern will no longer be in operation.
Datatron said that Waybern was forced into liquidation after several major creditors demanded repayment of debts. Waybern has total liabilities of about $2 million.
Datatron said that Waybern’s sales and profit margins deteriorated during the past year because of intense competition, price-cutting and an oversupply of product in the microcomputer industry.
Waybern accounts for 86% of Datatron’s sales. In fiscal 1984, Datatron lost $2.4 million on revenues of $16.2 million, with $13.9 million coming from Waybern’s sales. Datatron will not say how much of the loss came from Waybern. Last June Waybern had 30 employees, a number that has dwindled to 15.
Sources close to the companies said that if Waybern’s creditors try to recover their money from Datatron, the parent company may be forced to seek protection from creditors under Chapter 11 of the federal bankruptcy code. Datatron’s vice president of finance, Harry Pope, would not comment on whether the company might be forced to take such action.
“Waybern’s revenues are gone but so are its expenses,” Pope said. “This cleans up our balance sheet.” He said that without Waybern, Datatron is not “currently” profitable but “should become profitable shortly.” Pope would not be more specific.
Datatron makes test equipment for computer devices and machinery to make microprocessors. Waybern distributed desk-top computers and computer accessories for Columbia Data Products of Columbia, Md., and Eagle Computer Inc. of Garden Grove. Pope said that sales of both Columbia and Eagle, once high-flyers in the personal computer market, have declined sharply since the introduction of the IBM PC Jr.
