Article

Tranax Technologies files for bankruptcy

Tranax Technologies Inc., an ATM manufacturer that sells machines to independent sales organizations, has filed for Chapter 7 voluntary bankruptcy.

June 29, 2010

Tranax Technologies Inc., an ATM manufacturer that sells machines to independent sales organizations, has filed for Chapter 7 voluntary bankruptcy, citing debts of $1 million to $10 million. Tranax said its assets equal its estimated liabilities.

The Hayward, Calif.-based company filed June 11 in United States Bankruptcy Court for the Northern District of California in Oakland. In its bankruptcy filing, obtained by ATMmarketplace.com, Tranax listed 13 creditors, including Hyosung Corp. of America.

Tranax's bankruptcy filing occurred less than a month after U.S. District Court Judge Vaughn R. Walker entered a judgment May 25, ordering Tranax to pay Hyosung America Inc. and its parent company, Nautilus Hyosung Inc., $5.01 million plus daily interest of $1,742.52 until Tranax pays its debt. Nautilus Hyosung had to wait 14 days from that date before taking action to seize property to satisfy Walker's ruling. Walker issued his ruling May 6.

Won Gee Lee, president and CEO of Tranax Technologies Inc., and Michael D. Cooper, the firm's attorney, signed the bankruptcy petition. Lee said in the document it was in the "best interest of the corporation to file a voluntary petition in the United States Bankruptcy Court pursuant to Chapter 11 of Title 11 of the United States Code."

Lee added he is "authorized and directed to execute and deliver all documents necessary to perfect the filing of a Chapter 7 voluntary bankruptcy case on behalf of the corporation."

According to the U.S. Bankruptcy Code, Chapter 7 stops most collection actions against the debtor or the debtor's property. Nautilus Hyosung alleges Tranax created another company, Hantle USA, to make it difficult for Nautilus Hyosung to collect the money Tranax owes it. Grant Kim, Nautilus Hyosung's lawyer, alleged in a May 19 lawsuit Tranax's transfer of most of its assets to Hantle USA was a questionable contract.

"It was a fraudulent transfer because there is no record of Hantle paying for Tranax's business or customers," Kim says. The bankruptcy petition lists Hantle, which has offices in Fremont, Calif., as a creditor. Cooper did not return a call for comment. Tranax at one point issued a press release announcing that it changed its name to Hantle, but it retracted the statement.

Chapter 7 bankruptcy also can mean liquidation in which the debtor's nonexempt property is sold with sales' proceeds going to creditors. In addition to Hyosung Corp., Tranax's creditor list includes the Internal Revenue Service and Toyota Financial Services.

From 1998 to January 2007, Tranax Technologies served as the U.S. and Canadian distributor of retail ATMs made by Nautilus Hyosung Inc., parent company of Hyosung America, which is based in Coppell, Texas. In 2006, Nautilus Hyosung discovered Tranax had, without authorization, substituted another cash dispenser in Nautilus Hyosung ATMs and was selling the altered ATMs under the Hyosung brand name.

Nautilus Hyosung demanded Tranax stop selling the ATMs, and when it did not, Nautilus Hyosung refused to ship ATMs to Tranax. Tranax stopped paying Nautilus Hyosung's outstanding invoices, Nautilus officials said.

In 2007, Nautilus Hyosung and Hyosung America filed for arbitration with the American Arbitration Association, and in February 2010, the association ruled in favor of Nautilus Hyosung and Hyosung America. In its bankruptcy filing, Tranax lists the American Arbitration Association as a creditor.

Since the fight between the two partners occurred things have changed. In September 2008, Eltna, a Korean holding corporation, purchased Tranax. Lee took over as CEO, and Dr. Hansup Kwon, the company's longtime president and CEO, assisted in the transition to new owners and was a member of the board of directors.

Tranax manufactures eight ATMs for the retail off-premises market.

Included In This Story

---

Hyosung Americas

Hyosung Americas is a global human experience maker that bridges the physical and virtual worlds. We do this by harnessing our unique combination of a manufacturer’s soul with an innovator’s mindset to build a platform of integrated products, services, and ideas that improve life’s day-to-day interactions for everyone.

Request Info

Learn More