History (1993): Kalok Under Chapter XI

Kalok, a major Californian HDD manufacturer, was placed, on June 21 under the Chapter XI of the US fiscal legislation.

The bankruptcy petition was filed in the US Federal Court for the Northern District in San Jose, CA.

The company was founded in 1987 and is privately held, with headquarters in Sunnyvale, CA, and sales offices in Boston, MA and Minneapolis, MN.

There are 55 employees in engineering, sales, marketing and administration.

The company has large debts, but hopes to get out of this situation with the help of the Japanese TEAC and the Bulgarian DZU. These two partners own manufacturing licenses of its key product, a 25MB 3.5-inch HDD, only 1.27cm high.

TEAC, an investor in Kalok, has submitted a plan to provide interim financing while the restructuring process occurs, according to David Pearce, Kalok president and COO.

He added: “OZU has already made a significant investment in Kalok and has also submitted a plan for interim financing. OZU will continue to deliver drives assembled in Bulgaria.”

At the time of filing, the company listed $22 millions in liabilities and $7 million in assets.

A few weeks ago, Kalok’s new chairman, Robert Martell, a former executive of Seagate that has been announced as the saver of the company, was dismissed by its shareholders.

Kalok is probably not the last victim of an industry suffering of decreasing demands, and especially a severe price war. All leaders in this segment should announce losses or dropping profit in the second quarter of this year. We also heard that Marinex (San Jose, CA) was placed under Chapter XI of the US bankruptcy Court. It was known, at the same place, as Xebec America. Xebex of Japan was the company that acquired Kalok’s manufacturing plant in Manilla, Malaysia.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 66, published on July 1993.

Note: JT Storage acquired certain assets and assumed certain liabilities of Kalok in February 1994.