Offer Made for CompuSave by Eastern Investor Group
Five months after seeking bankruptcy protection, CompuSave Corp. has submitted a reorganization plan under which a small Pennsylvania investor group would buy a 70% stake in the company for $200,000 plus up to $950,000 in business loans.
The proposal from Aim Corp. of Bryn Mawr, Pa., would allow CompuSave’s creditors, now owed a total of $4 million, to immediately recover $200,000, or about 5% of their debts, from the defunct maker of electronic shopping terminals. The remainder of the debts would be converted into a new class of preferred stock.
The proposal, submitted earlier this month, is scheduled for review Friday morning by Judge Peter Elliott of the U.S. Bankruptcy Court in Santa Ana. If the plan is approved, the company would resume operations at its Irvine headquarters, said the acting CompuSave president, David Young.
However, this time, Young said, CompuSave will act only as a manufacturer of electronic shopping terminals and would not attempt, as it did before, to sell its own merchandise through the novel touch-screen devices.
Analysts attributed CompuSave’s rapid fall into bankruptcy earlier this year to an over-ambitious attempt to be both a manufacturer of the electronic devices and a mail-order retailer of about 2,500 household items.
Founded in May, 1984, CompuSave quickly became known for its innovative “shopping machine,” which resembled a refrigerator with a built-in television screen. The device allowed shoppers to view merchandise by simply pressing its touch-sensitive screen and then to buy items by inserting a credit card.
But rather than only making the devices and selling them to other retailers, CompuSave launched an extensive discount retailing operation using the machines. After the merchandise failed to sell and the company had accumulated losses totaling $11.6 million, CompuSave filed for bankruptcy protection in May.
Best Proposal Received
In the intervening months, acting president Young has searched for buyers interested in CompuSave’s technology. Young said Monday that the offer from Aim Corp. is the best proposal the company has received.
Under the plan, Aim Corp. would extend CompuSave an immediate $200,000 loan to resume operations and would pay creditors a total of $200,000. Later, Aim would arrange for a $750,000 line of credit for the company. For this, Aim would get a 70% stake in the company. Creditors and existing shareholders would have the remaining 30%.
Aim Corp., owned by businessman John Steele and his wife, Lillian Katchmar, of Bryn Mawr, is a small, privately held holding company whose other assets were not revealed. Katchmar said that she and her husband became interested in CompuSave because of their interest in uses of laser disk technology. The CompuSave shopping machine uses laser video disks in its devices.
