Federal Communications Commission officials and federal marshals yesterday interrupted an auction of corporate assets to block the sale of more than 300 personal computers that reportedly did not comply with government radio frequency emission standards.
The regulatory problems with IBM Personal Computer-compatible machines, manufactured by Odenton, Md.-based Seequa Computer Corp., are just the latest to beset the financially ailing company.
"There's no place for entertainment like Seequa," said Jim F. Hoffman, Seequa's vice president of marketing. "There was a little bit of drama but everything worked out. We had planned to start our auction at 10 this morning, but the FCC decided that today was the day to grab the computers we were to sell at auction." The computers eventually were sold, but it's not known when the bidders will be able to take them home.
Union Bank of Maryland -- one of Seequa's largest creditors -- was the beneficiary of yesterday's auction by Seequa headquarters. In addition to personal computers, Seequa sold various office fixtures from furniture to file cabinets.
"This is the auction to rid ourselves of unwanted inventory," said Seequa's Hoffman.
The auction drew a larger-than-expected crowd of nearly 800 people -- most hoping to fetch a bargain in one of Seequa's computers.
The sale was a far cry from Seequa's ambitious plans of but a year ago to become a major force in the IBM PC-compatible or PC-clone marketplace. Instead, a glut of ambitious companies discovered they faced declining demand, and a shakeout racked the industry. Another Maryland-based IBM-compatible computer company, Columbia Data Systems, recently went into Chapter 11 protection.
Seequa itself has been in dire financial straits and had to negotiate numerous arrangements with creditors. One bright spot earlier this year occurred when the company became a subcontractor for a Defense Department personal computer contract potentially worth more than $50 million -- but last month Seequa effectively sold its manufacturing rights to Televideo System Inc., a California-based personal computer company. Seequa has since shut down its manufacturing operations and has been selling off assets to satisfy its creditors.
However, the FCC has been complaining since last November that Seequa's computers are not adequately shielded to prevent radio frequency leakage that could interfere with other electrical devices.
"They were selling commercial computers that didn't comply with FCC rules," said Donald Bogert, a senior FCC engineer in the agency's Baltimore office.
As a result, the FCC moved to block the sale of the machines.
Displaying a keen sense of self-deprecatory humor, an FCC official told the crowd, "Hello, I'm from the government and I'm here to help you," before explaining that the personal computers would be seized.
A hasty meeting with lawyers enabled the auction to proceed under the condition that the FCC would test the computers in its labs before they could be used.
The auctioneer told the crowd that would take two weeks. The FCC said it would take at least four to six weeks.