Techmedia Files for Bankruptcy, Closes Up Shop
In the wake of a court order to pay nearly $100 million to creditors, Garden Grove-based Techmedia Computer Systems Corp. closed its doors this week and, along with its owner, Andrew Park, filed for Chapter 7 bankruptcy.
The Orange County firm and Park filed for liquidation in federal Bankruptcy Court in Santa Ana on Tuesday. The corporate filings include Techmedia, the holding company that managed its office facilities and two wholly owned subsidiaries, Techmedia Express and Techmedia Lighting.
In a Chapter 7 filing, a court-appointed trustee sells Park’s and Techmedia’s assets to pay creditors.
As part of the judgment against Techmedia, Judge Theodore Millard placed a $7-million lien against Park’s Laguna Niguel home and a $15-million lien against the company’s headquarters.
The judgment “was obviously a trigger for the timing of the filing,” said Martin Taylor, Techmedia’s bankruptcy attorney. “But even before, the company was suffering from the [consolidation] of the PC hardware market.”
The lawsuit stemmed from a contract dispute that began two years ago between Techmedia, a computer and electronics distributor, and South Korea-based Tae Il Media Co., which had supplied the large majority of Techmedia’s inventory since 1994.
The jury found that Techmedia and Park owed $122 million for breaching a distribution agreement and not paying for products supplied by Tae Il. Techmedia also was ordered to pay $27 million in damages and interest to Cho Hung Bank, a Korean bank that acted as a financier between the two companies.
Tae Il, however, owed Techmedia $50 million for terminating the distribution agreement without giving the company the required notice under their contract.
Techmedia, disputing the award, is appealing the court’s decision.
As recently as 1995, Techmedia was booming as a maker of computer “white boxes,” or PCs sold for less than established brands.
Techmedia also wowed the consumer electronics industry in 1997 with its wireless mouse. Dubbed the 3DZoneMaster, the hand-held device was compatible with most personal computers and could be used as a joystick for playing computer games.
Techmedia officially closed its operations when it filed for bankruptcy, Taylor said. The privately held firm had 250 employees as of last year. Company officials could not be reached for comment Friday.
