Dense-Pac Microsystems Inc., a Garden Grove electronics maker, said Tuesday that it has tentatively agreed to a financial reorganization plan that would offer full repayment to all creditors and would allow the company to emerge from bankruptcy by the end of October.
An earlier reorganization proposal offered only a partial, 40% repayment to unsecured creditors. A bankruptcy court hearing date to confirm the new Dense-Pac plan has been set for Oct. 14.
The latest plan calls for repayments to be financed by Electronic Memories and Magnetics N.V., a British electronics maker which assumed management control of Dense-Pac when the company filed for protection from creditors under Chapter 11 of the federal bankruptcy code in February.
Electronic Memories now has agreed to purchase 700 shares of Dense-Pac redeemable preferred stock for $1,000 per share. In addition, EMM has agreed to pay Dense-Pac $800,000 for equipment and technology which EMM previously had acquired for a nominal fee.
When the reorganization plan is confirmed, Electronic Memories Ltd., a wholly owned subsidiary of EMM, will convert to stock the loans it has made to Dense-Pac to finance its operations since February.
After the conversion, EMM will own about 49% of Dense-Pac's outstanding common stock.