Atlantic Computers’ creditors seem to be in for a very long wait with precious little to show if Administrators’ prognosis is correct. Atlantic Computer Systems Plc, the major operating company in the Atlantic Group, and progenitor of the controversial Flexlease, is estimated to have more than UKP250m of liabilities. The company has over 2,500 leases and the value of computers subject to leases amounts to approximately UKP500m with over 120 banks and finance houses involved in financing the equipment. Price Waterhouse says that liabilities have been accumulated under the flex and walk agreements, and a substantial amount has not been provided for in company accounts. Consequently, the extent of potential liabilities has still to be fully assessed, but is estimated to be UKP180m under flex clauses, and UKP70m under walk clauses. In addition to these liabilities, Atlantic accounted for UKP129.7m in respect of hire purchase and head lease payments, UKP11.9m on accruals for terminations, notified walks and lease sales, and UKP9.5m for trade creditors in respect of computer purchases and overheads. Price Waterhouse says that the complexity of the leases means that it is currently unable to assess the extent to which realisations may be possible, but it stoutly maintains that administration is more likely to benefit creditors than would immediate liquidation. However, many creditors feel that a lengthy period of administration will do little to alleviate their financial difficulties, and they remain unconvinced that the Administrators will be able to realise assets that still cannot be fully assessed. Price Waterhouse says that Atlantic Computers Inc, the US arm that went into Chapter 11 bankruptcy last week (CI No 1,464), still offers substantial opportunities for recouping money. Despite the exorbitant cost of Chapter 11 filing, the company was virtually forced into it because several large creditors were demanding repayments of $30m. There has been speculation that Bell Atlantic made an offer for Atlantic Computers Inc, but the Administrators say that no formal offers have been made, although there are several interested parties. The US creditors committee refused to allow Atlantic Computers Plc a seat on the committee, despite the holding company’s UKP84m claim on the US company, and that seems unlikely to change. It is indicative of the circular and incestuous nature of Atlantic’s liabilities that US creditors are looking to the UK for recompense while the UK is hoping to realise US assets and investments.
