Trustee forces liquidation of IES

A U.S. bankruptcy trustee has ordered the closure of independentservice organization Imaging Equipment Services, a Pittsburgh-basedfirm that has been locked in a marathon legal struggle with PickerInternational over third-party service. IES has shut its doorsand has let go its half-dozen employees, according to presidentThomas Quinn.

IES and Picker began their legal fight eight years ago whenCleveland-based Picker filed suit against IES accusing it of improperuse of the vendor's intellectual property to service CT scanners.IES charged Picker with trying to unfairly restrict third-partyservice of its scanners.

IES suffered a serious blow to its legal effort in July whenU.S. District Court Judge Mark Wolf rejected the last of the ISO'scharges against Picker and lambasted IES and Quinn for allegedlymisappropriating Picker's intellectual property. IES subsequentlyfiled an appeal of Wolf's ruling (SCAN 8/16/95).

The drawn-out case has taken its toll on IES, which filed forChapter 11 protection from creditors last year. According to Quinn,the trustee overseeing the reorganization forced IES into Chapter7 liquidation after reading Wolf's ruling. IES and its employeeswere given several hours' notice that their company was beingshut down, Quinn said.

"It's a terrible thing (the trustee) did," Quinnsaid. "It's one thing to liquidate a company, but it's anotherthing to do it this way."

Quinn said his reorganization plan for IES had the backingof 86% of the company's creditors and the firm was profitable.One stumbling block to the restructuring was the company's landlord,to which IES owed money.

The trustee decided to allow IES to continue its appeal ofWolf's ruling, however, and Quinn said he intends to pursue hiscase against Picker.