Seattle Firm Offers to Buy Datatron as Vehicle for Going Public

A Seattle financial services firm has proposed acquiring Tustin-based Datatron Inc. for about $1 million cash in a deal that would bring the former computer equipment maker out of bankruptcy and turn it into a credit card financing company.

Datatron sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in 1985. The company subsequently sold or closed all of its operations.

The acquisition offer from First Fidelity Financial Inc. is part of a reorganization plan for Datatron, which owes creditors $3.3 million.

Michael O’Murphy, president of First Fidelity Financial, a privately owned financial services company, said he expects the reorganization plan to be approved by the bankruptcy court in November.

Under the plan, First Fidelity would form a new, publicly owned company and issue convertible preferred stock and warrants to pay off Datatron’s debt. The new company would operate a group credit card financing business, said O’Murphy, who reported that First Fidelity had sales of less than $1 million last year.

By acquiring Datatron, he said, First Fidelity gets to use the Tustin company’s tax credits and is able to become a public company without the expense of an initial public offering.

The plan calls for the 2,200 shareholders of Datatron common to exchange their stock for common stock and warrants in the reorganized company.