Investor Group Makes Offer to Buy Into Eagle
Less than a month after filing for bankruptcy protection from its creditors, Eagle Computer Inc. said Tuesday that it has found an investment group willing to buy 40% of the company for $500,000.
Although the offer is the brightest piece of news in months for the business computer manufacturer, it by no means represents a completed deal. Eagle President Gary Kappenman said the proposal, which includes a still-secret debt reorganization plan, requires approval from Bank of America, which holds a $4.8-million secured note from Eagle. In addition, Kappenman said the offer expires July 14 and will not be renewed.
If the bank has not accepted the proposal by that date, Kappenman said, Garden Grove-based Eagle will face liquidation because it has no source of money to continue operating.
Kappenman said that for the last two weeks the investment group has been providing the company with enough money to keep its doors open while officials look for solutions to its deep problems. The investors, he said, will continue providing operating funds until July 14.
He said the investment group, which has declined to be publicly identified, approached Eagle with its proposal before the struggling company filed for Chapter 11 under the U.S. Bankruptcy Code on June 10.
Kappenman said the investors suggested that they would be more willing to put money into Eagle if the company is protected from its creditors by the bankruptcy filing, a common request by potential investors in deeply troubled companies.
If the proposal is accepted by Bank of America, Kappenman said, Eagle would be merged into a company controlled by the investors. He declined to name the company, saying only that it is not located in Southern California.
Kappenman said the investors would keep Eagle’s current management and would concentrate on getting the company’s much-touted new business computer system into production. The new computer, called the Concorde, had been seen by Kappenman as the company’s salvation when it was unveiled last November.
Kappenman said Eagle has received several orders for the system but has been unable to meet them because the company has not had enough money to start the manufacturing process. He said the $500,000 investment would be spent to get the machine into production. But, as he noted, “with just a half million dollars to refinance this company, it’s still going to be tight.”
