A Fall from Grace- The end to VISCorp's relationship with the
Amiga
Last year, in December, a license agreement was
signed between Amiga Technologies and VIScorp, for the making of
the Amiga set-top box. This product is network oriented and needs a
system like the Amiga with its video abilities and tight operating
system. The relationship between Amiga Technologies and VIScorp
built up from this time on became closer and closer.
- Petro Tyschtschenko, April 13 1996
As a licensee, VISCorp were an exciting company that would take the
Amiga into markets it had never been before. However, when it was
announced that Escom were selling Amiga Technologies to the company
for 40 million US dollars, warning lights appeared in the minds of
a thousand Amiga users. Will the Amiga be turned into a set-top
box? What about the desktop market? VISCorp were quick to deny
claims that the Amiga was dead as a desktop computer. The company
said one thing and then another. The Amiga world was thrown into
flux and the questions were getting louder. It seemed that the
Amiga would once again be sold, its power undervalued. To throw a
cog in the rumour mill before it went into overdrive VIScorp
released an "Open Letter to the Amiga Community", an unusual step
at the time, to show that users had nothing to worry about and that
the company would listen to their views.
To allow users to see for themselves, VIScorp announced an Amiga
conference in France. Bill Buck opened the conference by promising
to support and produce new Amiga desktop systems, before turning
the conference into a public demonstration of the ED. The event
hardly instilled confidence.
Faith in the company was further eroded when VISCorp went back
on a previous statement, announcing that the Walker was dead and
Amiga Technologies decision to use the Motorola PowerPC RISC
processor as the basis of a future Amiga may change when they
acquired the technology.
Belly up
On July 15th, 1996, Escom went into liquidation and the deal
remained incomplete. VISCorp were now dealing with liquidation
proceedings, and reduced their offer from $40 to $20 million.
Showing their belief that the purchase of Amiga Technologies would
be successful, Bill Buck and Raquel Valesco arranged with Bernhard
Hembach (the Escom Bankruptcy Trustee) to pay the salaries and
social/tax of Petro Tyschtschenko and his two staff (Krämer
and Andreas Steep), as well as continued production of the Amiga
from June to November 1996. If production had stopped a lot of time
and money would have been wasted bringing it back once
again.
The liquidation proceedings are, by their nature, very slow as
the company is slowly unwound. Explicit dates were given for the
sale and passed uneventfully. VISCorp were flamed by PIOS, a
company made up of a number of former Amiga Technologies staff.
Jason Compton reported a few months later that his job as
communications manager (in charge of PR) was turning into a
nightmare, as he could not make any serious reassurances to the
Amiga community.
The storm peaked when VISCorp lost the support of the two
respected Amigans that worked for the company. In a shock move,
Carl Sassenrath, head of OS development in charge of the
custom ED-OS, resigns and publicly flames his former employers.
Five days later, on November 29th, it was announced Viscorp had
canceled their bid for the Amiga. This is soon followed by the
resignation of Jason Compton on December 4th, becoming
disillusioned by the lack of action.
The Bloomberg Business News in an article on November 27th, 1996
reported the contract to buy the assets for Amiga Technologies GmbH
was canceled after Viscorp failed to pay the agreed $20 million. At
the time concern was raised that VISCorp was about to file for
bankruptcy itself. As reported in the news article, VISCorp
admitted in an October 29th filing with the Securities and Exchange
Commission, that it could not "generate sufficient revenues and
cash flow from operations to meet its business obligations." Their
licence to the Amiga technology would become void, leaving the ED
high and dry. Confidence in the company was at an all time low as
their share price fell from 1/2 to 2 7/8. A few months later, while
the media was focussed upon Gateway's acquisition of the Amiga,
Bill Buck, CEO of VISCorp, quietly left the company, along with
Raquel Valesco.
Why did Viscorp drop the Amiga purchase
The acquisition of Valesco GmbH a few months later poses the
question, "Why did Viscorp drop the Amiga purchase". Jerome
Greenberg, Viscorp's chairman of the board reported the contract
was allowed to expire because they did not believe the assets
justified the price. The year had marked a fall in price of
standardized PC hardware and the failings of set-top boxes had
become all too clear. The Web machine had failed to take off in
most other countries, apart from the US, due to the high cost of
telecommunication. It is also possible that the company's investors
had placed a prerequisite on funding, to abandon the Amiga and move
towards more successful platforms. Greenberg said at the time of
the cancellation
"We have funding in process but I can't tell you
any more than that"
In an interview with Petra
Struck of Amiga-News.de during 2002, Bill Buck indicated that
the VisCorp board of directors had become nervous when further
details of the Escom bankruptcy became public and had canceled the
contract. He comments:
"It became very complicated and ultimately VisCorp
cared more about its short term share price and completely
abandoned the entire set-top box strategy. We were never reimbursed
these funds, although we did win a legal settlement against VisCorp
later (the legal issues at the time prevented us from coming public
with the details). Petro worked with us and we worked hard together
to sell the Amiga inventory (which reduced the transaction cost,
but could not be used to pay personnel costs). In the end the
VisCorp board decided not to complete the transaction and we
resigned."
A brief chapter had closed in the Amigas history and soon after
Viscorp removed all Amiga-related material from their web site. Far
from being unworthy of the asking price, Amiga Technologies found
that a number of companies were willing to buy the company.
Magazines almost forgot the existence of Viscorp, focussing upon
the new contestant, Quikpak that had just entered the fray. This
lead many to believe the company had entered liquidation. Far from
the maddening crowd VISCorp were undergoing a rebirth, changing its
name to USDI and moving to California. However, it was not to be
and U.S. Digital announced their closure on June 14th, 2000.
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Last Update: 12/6/2002
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