EECO Reveals Plan to Repay Its Creditors
EECO Inc., the computer products maker that filed for Chapter 11 bankruptcy protection in May, said Thursday it has filed a reorganization plan to repay creditors and hopes to emerge from bankruptcy proceedings by the end of the year.
Scott O. Davis, chief financial officer, said the plan calls for the company to pay $7.5 million to its largest secured creditor, Sanwa Bank in Los Angeles, and take out a loan of $3.5 million to satisfy the remainder of Sanwa’s $11-million claim.
For the record:
12:00 a.m. Sept. 1, 1990 For the Record
Los Angeles Times Saturday September 1, 1990 Orange County Edition Business Part D Page 2 Column 3 Financial Desk 2 inches; 42 words Type of Material: Correction
EECO Inc.--A story Friday incorrectly stated EECO Inc.’s proposed bankruptcy reorganization plan. The company said it will issue a note to unsecured creditors for $1.1 million, or about 11 cents on the dollar, and also issue an unspecified amount of common stock to them to cover the remaining debt.
To satisfy its second-largest creditor, businessman Gary Beeson, the company will turn over ownership of its computer keypad manufacturing plant in Phoenix to Beeson, who is owed $6.5 million from the sale of his video-editing business to EECO. The company plans to lease back the facility from Beeson.
The company’s unsecured creditors claim they are owed a total of $9.5 million. Davis said the plan would pay unsecured creditors an amount equal to about 11 cents on the dollar. That amount would be paid in a note tied to the expected sale of EECO’s hotel computer subsidiary and EECO stock.
Steve Bergh, attorney for the creditors committee, could not be reached for comment.
The reorganization plan is subject to approval by the U.S. Bankruptcy Court in Santa Ana and EECO creditors.
