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Hot off the Press - News
by Keith Benicek, Managing Editor

CenDyne Inc. folds tent, may drag Verbatim brand with it.
August 20th, 2003

The very well known and respected CenDyne Corporation, distributors of DVD, CD-R/RW optical drives branded as Verbatim and CenDyne, mini MP3 players and assorted other computer and consumer gadgets, has been placed into receivership by it’s major investor Test Rite of Taipei, Taiwan. A spokesperson for CenDyne said that Test Rite “put the matter in Superior Court and a receiver was assigned.”

“The receiver confirmed that they will be attempting to sell the remaining CenDyne and Verbatim-branded product at a significant discount. There will be no rebates and no warranties provided on the products”, said the CenDyne spokesperson.

This came as a shock to many after, as the future for CenDyne Inc. looked better after the three original founders of CenDyne (Ed Meadows, President; Mo Vahdati, CEO and Dean Vahdati COO) were forced out of the company just a few weeks ago in a management dispute with Test Rite. The dispute was over the direction that the company was to be going in, an area of consumer electronics that Test Rite objected to and the huge losses that CenDyne had accumulated in heavy optical drive discounting and rebates.

Test Rite hold a 42% stake in CenDyne Inc. and is the controlling investor. Test Rite was also upset with a $100 to $150 Million-dollar target that failed to materialize this year. Test Rite wanted the company to remain only in the optical drive business. With the removal of the founders, all was thought be going in the right direction, so this announcement was a surprise to even industry insiders.

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What remains in doubt is the status of the very well established brand name in optical drives, Verbatim, that was managed for product distribution by the CenDyne/Peripherals Group, Inc. of CenDyne Inc. Verbatim, a subsidiary of optical drive maker Mitsubishi Chemical Company, Tokyo, Japan, still exists as a corporation.

Today an announcement was made by Verbatim Corporation that “Verbatim Corp. has decided to try to petition the receiver NOT to sell any additional Verbatim-branded DVD/CD burners”, the source reported. “They are, of course, concerned about customers who may not know about the status of CenDyne. They are also trying to determine if they will be able to provide any customer support for current users of Verbatim drives, but it is unclear if they will be able to do that.” Verbatim Corporation had also stated that they had no information on warranty coverage.

The contact at Verbatim also said “he may know more about the warranty at that point. However, he confirmed that it is his preference that no more Verbatim products be reviewed.”

We are just completing a major multi-segment article Buy or Build a Video/Multimedia Workstation , which includes a new Verbatim internal DVD 4x Combo Burner that supports both DVD-R/RW and DVD+R/RW. Our tests of this new drive show it to be very hot performer and a bargain even before any liquidation pricing, if that indeed happens.



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