Some customers of the struggling maker of storage products may be in for a surprise when they inquire about warranty repair work on defective drives and cartridges. They may find their drives not at SyQuest, but at Inter-Manufacturing Incorporated, based in San Jose, California.
IMI--which formerly contracted with SyQuest to perform warranty repair Work--said it is still holding drives and cartridges that were sent to the company before SyQuest filed for Chapter 11 bankruptcy protection in November.
Although the products are still under warranty, IMI plans to charge a minimum of $55 for the repair service, said Johan Willems, IMI founder and chief executive. SyQuest is no longer paying IMI to service the warranty products, he said. So IMI is charging customers.
The warranty news was tempered a bit by speculation that two competitors are bidding for the assets of the defunct disk maker, with one of the likely suitors being Iomega. Iomega makes the popular Zip and Jaz storage products.
Willems cautioned customers that while IMI can replace or fix the defective drives and cartridges, former SyQuest customers may not receive the exact product they sent in for repairs.
SyQuest recently shut down its system that allowed IMI to cross-reference customers' material return authorization numbers with the defective products it held. As a result, former SyQuest customers may also have a difficult time retrieving the data from their defective cartridges that SyQuest sent to IMI.
Although SyQuest said it hopes to have a vendor in place in the next 30 days to handle warranty repair work, Willems said he can offer limited service to former SyQuest customers with warrantied and non-warrantied products.
SyQuest started to show minimal signs of life late last month. On December 30, the company reactivated its Web site to provide customers with access to "product information, specifications, software drivers, utilities, downloads, and [the company] knowledge-base." Customers, however, say the service is a hit-and-miss affair and that the Web site is bouncing e-mails back.
Sale to Iomega?
SyQuest hopes to have a definitive agreement signed by the end of the week with a prospective buyer for its assets, said Tobias Keller, SyQuest's bankruptcy attorney.
Keller, however, said it will be up to the bankruptcy court to approve the offer. Currently, SyQuest is weighing bids from two suitors.
Although Keller declined to identify the candidates, sources said competitor Iomega, and independent repair storage company PCS, are in the running.
Iomega officials declined to comment. PCS president Tu Nguyen said his company would be interested in acquiring SyQuest's servicing business but that it would not be interested in its manufacturing operations.