1965
General information
The creative financing provided to Commodore through its association with Atlantic Acceptance Corporation that had allowed Commodore to pursue its aggressive growth and acquisition strategy came unglued in 1965 with the collapse of Atlantic Acceptance Corporation and the fraud investigation that accompanied it. Trouble began with Commodore's 1965 purchase of Willson Stationers & Envelopes, Ltd., the largest retailer of stationery and office supplies in Canada.
The purchase of Willson was approved at a meeting of the Commodore board of directors on April 7, 1965.<ref>Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited, p.478</ref> At that time, Commodore's growth and operations were still being funded by Atlantic Acceptance Corporation and it could not have been known by Commodore's board that Atlantic would collapse just two months later in June of 1965. It was assumed that the $3 million needed to secure the purchase of Willson would come from Atlantic, so a purchase agreement was signed and a $100,000 deposit toward purchase was made on April 22, 1965.<ref>Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited, p.480</ref>
When it became clear that Atlantic was not in a position to fund the purchase, Commodore borrowed $3 million from Traders Realty, Ltd on a 6 month term at 11% interest on June 11, 1965. The provisions of the loan required Commodore to use its largest asset, Willy Feiler (the West German manufacturing company owned by Commodore) as collateral for the loan.<ref>Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited, p.481</ref>
On June 16, 1965, Atlantic Acceptance Corporation collapsed and defaulted on its entire debt of over $100 million. Commodore became entangled in this collapse not only because Atlantic had been their source of funding but also because Commodore and Atlantic shared three board members in common. This resulted in the three Atlantic board members resigning from Commodore's board and a years-long fraud investigation by the Canadian government.
On June 23, 1965 the purchase of Willson Stationers was completed, which gave Commodore six months to pay off a $3 million loan or they would lose Willy Feiler, their primary means of manufacturing.<ref>Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited, p.484</ref>
In July or August of 1965, Jack Tramiel met Irving Gould through Gould's companies Amber Holdings, Ltd and Jaypen Holding, Ltd which Commodore was borrowing money from to survive. Tramiel and Gould discussed solutions to the dire position that Commodore found itself in which resulted in Irving Gould's company Amber Holdings acting as the broker in the sale of Willson to Boise Cascade in October, 1965.<ref>Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited, p.487</ref>
With Commodore still in debt to Gould's Jaypen Holdings even after the sale of Willson, Tramiel began negotiations with Gould on November 8, 1965 to resolve the debt. This led to Irving Gould arranging for the sale of key Commodore assets through his own companies, earning a commission on each sale.
Notable company events
- The famous "chicken lips" logo appeared for the first time on the cover of the 1965 annual report to shareholders
- The first deliveries of office furniture manufactured at Commodore's new plant behind their main Canadian headquarters were made in the spring of 1965.
- Commodore's 50% stake in International Typewriter Company of Los Angeles, California was sold for $28,368 on October 29, 1965.
- Atlantic Acceptance Corporation, the company that was financing Commodore's growth, collapsed and defaulted on its entire debt of over $100 million.
Products
Revenue and profit
| Revenue | $7,726,531 |
| Net profit (loss) | ($1,051,714) |
Directors
| Jack Tramiel - Toronto | President |
| Manfred Kapp - Toronto | Executive Vice-President |
| Rennie A. Goodfellow - Toronto | Partner, Barrett, Goodfellow & Co. |
| Carl M. Solomon - Toronto | Partner, Solomon, Singer & Solway |
Officers
| Jack Tramiel | President |
| Manfred Kapp | Secretary-Treasurer |
| Thomas McGourty | Vice-President, Manufacturing |
Corporate entities and subsidiaries
| Location | Corporate Entity |
|---|---|
| Canada | Commodore Business Machines (Canada) Ltd. |
| Belpree Co., Limited | |
| Humber Typewriters and Business Equipment Ltd. | |
| Associated Tool & Manufacturing Ltd. | |
| New York | Commodore Business Machines, Inc |
| West Germany | Willy Feiler Zahl-Und Rechenwerke GMBH |
| Shannon, Ireland | Commodore Industries Limited |
June 30, 1965: Commodore Business Machines (Canada), Ltd. Annual report to shareholders