Infoscribe’s Creditors OK Reorganizing Plan
Nearly two years of struggling to remain in business apparently have paid off for Infoscribe Inc., whose creditors approved its bankruptcy reorganization plan, clearing the way for the Santa Ana firm’s acquisition by another scientific instrument maker.
Under the reorganization plan, begun a month ago and approved Monday in U.S. Bankruptcy Court in Santa Ana, Infoscribe will be reincorporated as a subsidiary of Eurotherm International Inc., of Reston, Va., within 10 days.
The Virginia company is the U.S. arm of Eurotherm International, a publicly traded company based in Worthington, England.
Although details of the agreement were not announced, sources close to both companies estimate that most of Infoscribe’s creditors will be paid 20 to 30 cents on the dollar for the $2.7-million debt. The company said that other investors will be paid back through future company profits.
‘Delighted With Reorganization’
For Infoscribe, the acquisition represents a reprieve from near-certain death, as Eurotherm plans to pump millions into new products and expansion. With its overseas markets, Eurotherm could greatly enlarge Infoscribe’s customer base.
“We are delighted with this reorganization,” said Terry Brewer, president of Eurotherm. Eurotherm has provided interim financing and contract management during Infoscribe’s reorganization proceedings under Chapter 11 of the federal Bankruptcy Code. For years, Eurotherm has been a major supplier to Infoscribe, but when Infoscribe filed for bankruptcy last August, Eurotherm senior executives saw it as an opportunity to enter the printer market. Most of Infoscribe’s 20 employees already have been added to Eurotherm’s worldwide work force of 1,700, but the only Infoscribe senior executive to remain with Eurotherm is Larry Niles, former operations vice president who was named chief operating officer of the new subsidiary. Brewer said that he expects to add employees this year as new products come on line.
Creditor Still a Supplier
One of Infoscribe’s largest creditors, DH Technology Inc. of Sunnyvale, Calif., continues to supply the company with heads for its printers. “We are still doing business with them, but we ship on a c.o.d. basis,” said Dan Leader, DH Technology’s comptroller. “They are one of our major customers,” he said.
That business could soon increase as Infoscribe’s new parent company has plans in the pipeline for new computer printer products, Brewer said. Among them is a dot matrix printer designed for the word-processing market that will handle all types of paper.
In fiscal 1984, Eurotherm posted net income of more than $7 million on revenues of $75 million, Brewer said.
At the time it filed for bankruptcy, Infoscribe’s annual revenues were about $5 million.
