Escom AG, the Heppenheim personal computer manufacturer and retailer operating under protection from its creditors, declined comment on reports that its receiver would recommend it file for bankruptcy, but the reports wiped 30% of Escom’s share price which closed down 0.78 marks at 1.85 marks, the largest decline since the news that it had filed for protection. Bernhard Hembach, receiver in Escom’s composition proceedings, told German newspapers and television that he believed the best course of action would be to file for bankruptcy. Under German law, a company must file for bankruptcy if it fails to get agreement from a majority of its creditors to a restructuring plan enabling it to pay back 35% of what it owes within a fixed period. In a bankruptcy proceeding, Escom’s assets would be sold and the creditors repaid from the proceeds. Meantime, Microvitec Plc, reacting to the recent drop in its share price, says it now has no links Escom AG: the board wishes to stress that Microvitec’s trading relationship… is not with Escom, but with its subsidiary company Amiga Technologies GmbH, which is not part to the court order obtained by Escom and is being sold to Visual Information Service Corp, Chicago.
