To: Joe Copia who wrote (22 ) 4/23/1999 6:28:00 PM From: Puck Read Replies (2) | Respond to
I just noticed this thread. Aside from Ramsay, Hughes and Associates, I didn't know anyone in the world thought about Comptronix these days and wouldn't have so guessed. I purchased their shares in the aftermath of the accounting scandal (sometime in 1993, long before SI was born) when it was announced that the class action lawsuit shareholder plaintiffs had decided to accept compensation from the company partly in the form of convertible debentures and not force a liquidation. The acceptance of equity by plaintiffs in such a circumstance is highly unusual in my experience and my risk arbitrage instinct impelled me to believe that the company had a reasonable chance to survive, knowing that the plaintiffs had access to the company's restated accounting position before it was released to the public in coming to make their decision. As I saw it, the odds of survival were in the company's favor, and given the stock price relative to revenues, any shareholder who held on through a turn-around would be well rewarded. The downside was that the company wasn't out of the woods yet and the very real chance of failure still existed. I knew that this was pretty much an all or nothing situation and decided to take a small position appropriate to my risk tolerance. As it turned out, the company limped along for several (four?) more years before it finally died. It's financial resources proved to be too limited to weather the inherent volatility of their business environment. They had about twenty major customers (all big name blue chip co's you would recognize) who pretty consistently were changing their order size and quite often, deferring their order until the next Q for one reason or another, usually relating to week to week changes in their sales program. Comptronix's primary lender, the CIT group, had clauses regarding order intake, backlog levels, inventory levels and so on which, unfortunately Comptronix violated one quarter because some of their customers chose to defer some large orders at the last minute, placing them in technical default of their loans. CIT Group chose not to forgive them anymore and called in their loans. Comptronix declared chapter 11 and was able to repay their secured lenders in full, their unsecured lenders 60 cents on the dollar and had nothing left over for their equity holders. Their manufacturing assets were sold to the Sanmina Corp. at 60 percent of book value, a great buy for them. After the liquidation was completed the publicly traded shell company, now known as CPTX (the original symbol had bee CMPX), still remained, and I still have my shares. Late in 1997, about a year after the bankruptcy settlement, I tracked down Comptronix's former Chairman and CEO Duncan Townes, at the Brentwood, TN address someone on this thread found earlier and asked him about why the shell company stock persisted in showing up on my brokerage account records. He confessed that his Comptronix stock holdings also showed up on his brokerage account statements and said that he'd been told that "the lawyers still haven't finished up." And that was that. I don't know where Mr. Townes is but if I knew I would ask him if he knew about Ramsay Hughes's recent accumulation. I suspect that they are attempting to gain control of the holding to engage in a reverse merger with some corporate entity they advise. The holding company's status as a publicly owned and traded entity still is of value, and merging it into a full bodied private company is a quick backdoor into having a publicly traded company overnight. In fact with my personal resources, I could have bought Comptronix (at 16,000,000 shares outstanding this would have cost between one and two hundred thousand if my accumulation didn't drive the price up) and merged it with any one of a number of private companies friends of mine own and--whalla!--reincarnated them into publicly owned co's overnight. iParty (bb:IPTY)is a well known creation of a reverse merger. There are estimated to be between twenty and thirty thousand publicly traded company's and many of them are basically shell companies like this one, remnant husks, or shadows, of companies once alive, if for just a brief time, many probably stillborn, that linger as forgotten memories in the twilit outer fringes of the equity markets.
