What is the status of the company?
Quantegy is officially in Chapter 11. However, the company has been able to bring 10 skilled employees back to work and has started production on a modest amount of tape that should be sufficient to meet demand for approximately two months. There is no need for people to be price gouging.
What about the rumors regarding the unavailability of the necessary components for making tape?
Rumors that the necessary ingredients for making tape have become unavailable are false. [More than] one-and-a-half years ago, when one chemical became unavailable, small changes were made in the oxide formulation. The tape made with that change has been being sold since then and the company has received no complaints. Although certain longtime customers noticed at the time that there was a slight difference in the sound, some have commented that it was an improvement. In addition, conversations have been held with Quantegy suppliers to confirm that manufacturing ingredients will continue to be available in the coming months.
What is the possibility of Quantegy’s creditors forcing liquidation, vs. a work out plan?
While that is always a possibility, liquidation brings less money and is not in creditors’ best interests. In addition, several parties have expressed interest in investing new money in the company.
What is to stop another manufacturer from starting up, making and selling tape in small runs now that demand has increased prices?
Making tape is a craft, like making Martin guitars. A new manufacturer wouldn’t have the experience to do it right. Quantegy is very proud of its quality, and has made a huge investment in manufacturing, something not easily duplicated. A new manufacturer would have to compete with Quantegy, who expects to stay in business. Quantegy has remained in business as long as it has, outlasting other competitors, because it made the best tape.
Will prices be raised to accommodate the reduced output?
Possibly, in the range of nine to 10 percent to cover increased costs.
What is Quantegy’s biggest market sector for tape?
The studios. We do actually feel like it’s a kind of sacred trust. We’re the only guys doing it and we don’t want to walk away from that.
How is your relationship with your creditors?
Getting better! Most of them have been with us for years. One particular Japanese supplier has said that what they won’t get back financially due to our reorganization is a mere drop in the bucket to the amount of money they’ve made through our relationship over the years. They’re not going to throw that away and are looking forward to working with us when we emerge.
How is your relationship with your distributors?
We are disappointed that some of our distributors have gotten into gouging. However, many others, like RMS in Los Angeles, have been straight dealers and we don’t want to disenfranchise them. Although we want to set people up on our gopromedia.com Website, or at our 800/752-0732 number for order entry, in general, that is for large buyers or for people in out of the way geographical locations. We don’t intend to get into our distributors’ business, and we especially want to support the ones who have not given in to price gouging.
Will you continue to sell hard drives?
Hard drives are part of what our customers are asking for and we believe sincerely in our process and packaging. We will continue to sell them.