A bankruptcy petition filed by TU International Inc. of Falls Church and its subsidiaries has produced confusion about two companies with similar names. There is no connection between the TU subsidiary, Microlog Inc., based in New York, and Microlog Corp. of Gaithersburg. Microlog Corp., a manufacturer of automatic telephone dialers and other telecommunications equipment, is owned by Old Dominion Systems Inc. of Gaithersburg.
TU International Inc., seeking protection from its creditors, has asked for permission to reorganize under Chapter 11 of the bankruptcy laws.
The Falls Church distributor of computer equipment and software filed its reorganization petition in U.S. Bankruptcy Court in Rockville late Thursday afternoon after it became clear that its two principal lenders would not provide further financing to TU or any of its subsidiaries.
"We just ran out of time and could not wait any longer," said Thomas Maney, who became TU's chief executive officer -- its fourth in less than a year -- several weeks ago.
"TU certainly owes a lot of money to unsecured creditors," said Daniel Lewis, an attorney with Arnold & Porter, the law firm that is representing the company in the bankruptcy proceeding.
However, Lewis added, it is unclear just what the company's exact debts are because there are no "precise figures." Lewis estimated, TU owed "several millions of dollars."
TU is seeking relief for itself as well as for four subsidiaries: Terminals Unlimited Inc., TU Leasing, D. Owens & Associates Inc. and Microlog. According to the company's filing, the four companies had assets totaling $28 million and liabilities adding up to $28.9 million.
Lewis said that TU was unable to meet its payroll Friday. However, he said that the company hoped it could issue paychecks to its 80 employes next week, if the bankruptcy judge permits the company to use cash now pledged as collateral. A hearing is expected to take place Tuesday.
The company is meeting with its suppliers -- computer manufacturers and software vendors -- and customers to work out a relationship that would permit it to continue operating.
"Recently signed contracts of the companies, if performed, should provide the companies adequate future income to support a successful reorganization," Maney said.
Among those contracts is a $10.2 million contract TU just won from the Social Security Administration to provide a microcomputer network.
When the contract was awarded two months ago, TU officials said they hoped the company's financial woes were finally beginning to end.
The 8-year-old company has been wracked by a severe cash-flow problem that has forced major layoffs and several changes in management, including the departure of its founder and chairman, David M. Owens.
Owen's departure came shortly after First Tarent Inc., a 2-year-old Dallas firm, purchased 80 percent of TU for $7 million in notes and property. First Tarent still holds majority control of TU.
Lewis said that another top officer, executive vice president Edward R. Silansky, was dismissed Wednesday evening.
Although TU stock is still publicly traded in some markets in New Jersey, the company lost its listing with the National Association of Security Dealers last December after it failed to file current financial papers with the Securities and Exchange Commission. No financial information has been filed with the federal agency since March 1984.
At that time, TU's auditors noted that the company's "working capital is an area of extreme concern," and that the company was in technical default to one of its two major lenders, Dominion National Bank.
Maryland National Bank, TU's other major lender, declined to comment on the company yesterday because of the litigation.