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© 1997-2006
Gareth Knight
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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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