When Grace Capital emerged from bk,
it became Telergy. Note the link to two favorites -- Vancouver and the Isle of Man.
Copyright 1989 UMI
Copyright The Business Journal of Portland Inc. 1989;
Business Dateline;
The Business Journal-Portland
June 26, 1989
HEADLINE: Telergy Delays Plans as Big-Name Support Fades
BYLINE: Tom Gauntt
DATELINE: Portland; OR; US; Pacific
BODY:
Nine months ago, Portland-based Telergy Inc. seemed to have everything going for it. The small public company, built on the ashes of two failed companies, had big plans in real estate, convenience stores and a network of computer kiosks.
Telergy, the brainchild of Michael Deakin, a flamboyant British financier, had signed a deal with International Business Machines Inc. Telergy also was talking with real estate broker Coldwell Banker and had leased the top floor of the new Lincoln Tower near Tigard.
Now things are less rosy. Telergy officials still say their ambitious plans are on, only delayed. But the relationships with big-name companies are dwindling.
So far in June, IBM has repossessed about $ 650,000 in computer equipment, and Trammell Crow Inc., owner of the Tigard high-rise, has won a $ 1.2 million judgment against the lease on Telergy's office. And a Coldwell Banker official last week said there would be no future relationship between the real estate giant Coldwell Banker and Telergy.
To top things off, Deakin, Telergy's chairman and chief executive officer, has moved to Vancouver, B.C.
Although Deakin could not be reached for comment, other Telergy officials said they are confident everything will work out.
"We have some things cooking that are very good," said Richard Packham, senior vice president.
Packham said Telergy still plans to create a vast network of 42,000 computer kiosks in 130 cities around the world. The kiosks, under Telergy's plan, would be the base of a new retail ordering concept in which credit card customers could order almost anything from a computer terminal.
Another part of Telergy's plan involves buying up troubled office buildings from ailing thrifts. Relying on $ 100 million in joint venture money from European investors, Telergy mapped out a complicated plan to buy some buildings and manage them.
Mark Madden, a vice president at Coldwell Banker, said in September that the plan was complicated, but workable. "We're hopeful some kind of relationship will develop," he said at that time.
In the end, "We decided to pass on it," Madden said last week. "There wasn't the validity (to the plan) we originally thought, so we decided not to do business."
Packham said the $ 100 million pledge is still there from a company called the European Investment Corp. Ltd., an investment group based on the Isle of Man, a tax-sheltered island between Great Britain and Ireland. While the agreement to use the money still exists, Packham said no properties have been purchased.
At the moment, Telergy is having problems just holding on to its office at the Lincoln Tower. Packham said the company has been ordered out of all but a small office space.
Most of the 19,000 square feet Telergy originally leased in Lincoln Tower was taken up by its computer operations. Soon after IBM hauled away the computers, Lincoln Tower took over that space.
"We're negotiating with Trammell Crow now," Packham said. "We hope to relocate to more modest facilities either in this building or elsewhere in Portland."
In the meantime, Trammell Crow has won a $ 1.2 million judgment on the five-year lease. A Washington County Circuit Court judge ruled that the lease was in default because rent was four months in arrears.
"We took the default judgment," said Don Ekman, an attorney with the firm of Bullivant Houser Bailey Pendergrass & Hoffman, who represents Trammell Crow. "But it's probably not worth the paper it's written on. As far as we know, there aren't any other assets."
Even before the recent problems, Telergy has had an interesting history. Telergy dates back to 1984 when it was part of Burlatta Investment Co., a Salt Lake City-based mining company. Telergy went public in 1985 as a penny stock and in 1986 decided to get out of the mining business.
Telergy's management hired De-Whit Financial Services Inc., Deakin's consulting firm, to chart a new course for Telergy. About the same time, De-Whit was also working for Grace Capital Corp., a Lake Oswego company whose main operation was Grace Telecommunications. Both companies had financial trouble, and De-Whit managed to convert its consulting bills into strong equity positions in both Telergy and Grace.
In April 1987, Grace filed for Chapter 11 bankruptcy protection in Portland's U.S. Bankruptcy Court. Grace had no assets and $ 187,730 in liabilities.
Deakin fashioned a reorganization plan for Grace in which creditors became shareholders in the reborn Telergy. The new company emerged from bankruptcy in October 1988.
At that time, Telergy officials were glowing, inviting reporters to their toney office where meetings were presided over by a regal portrait of Winston Churchill. Deakin said by 1993 Telergy would have $ 250 million a year in revenue.
Original plans called for some kiosks to be in place by Christmas 1988, but no kiosks have appeared as yet. In September, Deakin said Telergy would have 80 employees by mid-1989. Packham said the company has about five employees now, including Deakin.
Deakin, however, moved to Vancouver, B.C. in May, and Packham said Deakin was concentrating on work for De-Whit, although Deakin still is doing work for Telergy. |
