Computer Automation Wins Court Ruling
Computer Automation Inc., the ailing Irvine electronics maker, Wednesday won the first skirmish in its legal battles with Larry Doskocil, a Kansas businessman and disaffected investor in the company.
According to a federal court ruling, Computer Automation is entitled to use the $220,000 remaining from Doskocil’s $3 million investment in the company. In a $16 million fraud and breach of contract suit filed last month, Doskocil asked the court to prevent the company from using the funds remaining from his $3 million purchase of subordinated debentures in August.
The ruling late Wednesday from Judge Richard Gadbois allows the suit now to proceed on its claims, Computer Automation president Douglas Cutsforth said. Neither Doskocil nor his representatives could be reached for comment.
Cutsforth said the company had fought Doskocil’s attempts to regain control over the $220,000 by telling the court that such a move ultimately could bring Computer Automation to the brink of bankruptcy.
However, Cutsforth acknowledged Wednesday that the company, while suffering a severe cash shortage, generally has as much as $1.5 million available to it on a line of credit with First Chicago Bank.
