Got this off the Yahoo board, in case it was missed. Wonder what Mr Richardson's chancws of succeeding are. Here is a wish for his success and good luck to all holders.
TODAY'S OTTAWA CITIZEN
by: briannoel2
568 of 570
Thursday 25 February 1999
Plaintree summons the surgeon
Turnaround specialist to try to revive firm
Bert Hill
The Ottawa Citizen
The Ottawa Citizen / Chief technology officer Colin Beaumont says he is relinquishing his role as CEO to
experienced corporate doctor Jay Richardson.
Troubled Plaintree Systems Inc. has brought in a corporate doctor with a mandate to get the company out of
intensive care.
The Stittsville-based networking company announced yesterday that Colin Beaumont is out as chief executive
and Jay Richardson, a chartered accountant, will take on the task of trying to find new capital for the
long-suffering company.
Mr. Richardson said he has been "a corporate doctor my entire career.
"Plaintree has succeeded in extending the life of the company (beyond an original 30-day deadline for new
financing), but I'm not going to give you an ETA (on a cure.)."
Nervous investors dumped Plaintree stock yesterday, driving it down seven cents -- or 28 per cent -- to 18 cents in
heavy trading. Last March the stock traded for $4.95.
Mr. Richardson has broad international experience with Clarkson Gordon and with Arthur Young and KPMG in
Vancouver, Singapore and London.
For the past six years he has operated Manaca Inc., a two-person Toronto consulting boutique that works with
troubled companies.
Plaintree said it accepted Mr. Beaumont's resignation with regret and that he would continue as chief technology
officer and director of the company.
Mr. Beaumont had recommended to the board that he step aside in favour of Mr. Richardson's superior financial
skills after working with him on the project for three weeks.
"We're talking to a couple of companies on a fairly energetic basis, but we're not at the point of having the lawyers
look at the details of an agreement," Mr. Beaumont said.
Mr. Richardson said the plan to save the company could involve making a deal with more than one corporate
interest.
However, he said Plaintree is still worth more as an on-going concern than by auctioning off pieces of its
technology.
After years of failed attempts to break into the high-end networking market, Plaintree brought in Mr. Beaumont, a
retired top engineer with extensive experience at Nortel, to try and turn around the company last spring.
Nortel put in $9 million in fresh capital and took a 19-per-cent stake in the company. But the attempt to find fresh
markets for its traditional product line, while a new line of switching products aimed at the Internet was developed,
also flopped.
Despite a small increase in sales in the quarter ending Dec. 31, Plaintree still lost $5 million -- its 14th consecutive
quarter of losses.
Plaintree announced on Jan. 14 that it was looking $5 million to $8 million and warned that if it didn't find the
money, it could fold within 30 days.
Last month it laid off 50 employees -- one-third of the workforce -- in a bid to reduce the monthly payroll of $2
million and conserve a dwindling cash reserve of $3 million.
Mr. Beaumont said the company is continuing to make sales and customers are not holding off decisions out of
fear that Plaintree won't survive. |
