The industry has banded together to prevent debt forgiveness becoming the accepted norm, sparked off by a letter written by Mike Norris, chief executive at reseller Computacenter, who called on suppliers not to support the practise.
Norris' letter refers to SCH's takeover of Preview Data Systems, where the takeover was dependent on creditors accepting 33 per cent (PC Dealer, 21 January).
The letter claimed: 'I am confident that any reputable supplier in this industry would not allow this to happen.' Norris stated that such practises 'penalise stable companies that do not get into financial crisis'.
Graeme Watt, MD of Computer 2000, commented: 'This was a small debt to us, but while the principle was unusual it could set a precedent. We would have to look very hard at this if it came up again.'
An anonymous credit manager claimed: 'It would stick in my gullet to accept such a deal even if it meant losing the debt.'
Deborah Pennington, computer sector intelligence unit manager at Graydon, said: 'If SCH tries it again there will be resistance - everyone is feeling hard done by. But creditors would have been in a worse position if it had gone under.'
Norris used the example of the attempted takeover of French reseller ISTA by GE Capital. He said: 'To my knowledge, all major and reputable suppliers have not offered debt forgiveness. I urge you to do the same in this country.'
Alan Thompson, director of Toshiba's PC division, said: 'If debt forgiveness is something which is played into negotiations then it becomes impossible to accurately value a company.'
SCH defended its action, claiming 'the group choose to seek a solution to enable Preview to be sold as a going concern'. The statement said: 'Time was critical and did not allow for a creditors voluntary agreement process and procedure.
SCH took an honourable course.'
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