Franklin Goes Chapter 11

Franklin Computer, maker of Apple-compatible computers, has filed for reorganisation under Chapter 11 of the US Federal Bankruptcy Code.

In a prepared statement, Franklin president, Morton David said the company was experiencing falling sales and a “strain in financial resources’. To date, the company has about $US33.9 million in assets and $US22.8 million in liabilities, a spokesperson said.

The company owes significant sums to at least 20 unsecured creditors. Under Chapter 11, acompany is protected from its creditors while it reorganises, which usually takes several years. “We will spare no effort to turn Franklin around,” David said.

Franklin owes $US920,483 to Texas Instruments and $US4.9 million to National Westminster Bank USA in New York, the biggest secured lender.

Franklin is still trying to find a way to pay Apple Computer the $US657,000 remaining from a $US2.5 million out-of-court settlement. Franklin and Apple were involved in a two-year legal battle over copyright infringement of Apple’s operating system.

Despite problems, Franklin will still offer full technical support for its ACE 1000 and 1200 machines, more than 100,000 of which have been sold throughout the US.