Amplifier Firm Acts to Avert Chapter 11 Filing
California Amplifier has reached a tentative agreement with some of its largest creditors on a repayment plan that the company says may enable it to avoid seeking protection from creditors under Chapter 11 of the U. S. Bankruptcy Code.
The 5-year-old Camarillo company also said Monday that it is continuing merger talks with a privately held military electronics company to try to resolve its financial problems.
Earlier this month, California Amplifier, a maker of components for satellite-dish systems, had asked its 250 creditors for a moratorium on repaying its debts, which total about $2 million.
The company’s four largest creditors, including Torrance-based Mitsubishi Electronics America and General Circuits of Menlo Park, are suing California Amplifier for repayment of $800,000. All four have agreed to the moratorium, pending a May 15 meeting at which repayment negotiations are expected to resume.
California Amplifier and other companies that make equipment for satellite-dish antenna systems have suffered recently as several television services have begun scrambling their signals. Many consumers no longer buy the equipment, fearing that they will not be able to receive much of the programming free any longer.
But California Amplifier was suffering even before the signal scrambling began. During the nine months ended Nov. 30, California Amplifier lost $1.1 million as its sales declined 29% to $11.2 million. The company has been phasing out its manufacturing operations since February, cutting its work force from 250 to 70.
California Amplifier’s main product is a device that magnifies remote television signals from space.