Quantex, CyberMax Go Silent

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From PC World.com

Quantex, CyberMax Go Silent

by Tom Mainelli and Anush Yegyazarian, PCWorld.com

Two well-known direct-PC vendors-- Quantex (http://www.quantex.com) and CyberMax (http://www.CyberMaxpc.com) --were ignoring sales and support calls this week after their apparent corporate parent filed for bankruptcy protection.

Neither Quantex nor CyberMax would comment on the record to PCWorld.com. Calls from both PCWorld.com and its readers to the companies' sales and support numbers met busy signals, went unanswered, or were put on automatic hold and eventually dropped.

The uncharacteristic silence comes less than a week after Fountain Technologies (http://www.ftn.com) --which appears to be the corporate parent of the two privately held firms--filed for protection from its creditors under chapter 11 of the U.S. bankruptcy code, which allows companies to reorganize and continue to do business.

The filing by the Somerset, New Jersey-based company lists assets of $18.2 million, but liabilities of $80 million. Among its creditors are some of the biggest names in technology. They include Intel, (http://www.intel.com) which it owes over $13 million; Microsoft, (http://www.microsoft.com) which it owes nearly $4 million; and AMD, (http://www.amd.com) which it owes $3.6 million. The filing took place in the United States Bankruptcy Court for the Southern District of New York. (http://www.nysb.uscourts.gov)

Fountain's bankruptcy filing indicates that, at "its peak, the Debtor employed 689 employees. The Debtor now has about 175 employees."

Though neither Quantex nor CyberMax approaches the sales volume of leading direct-PC retailers like Dell and Gateway, their models have won wide acceptance from consumers and performed well on standardized tests. In the September 2000 issue of PC World, for example, they occupy 5 of the 30 spots available in the magazine's monthly listing of Power PCs, Midrange PCs, and Budget PCs.

Company Relationships Unclear

The impact of the filing on owners of Quantex and CyberMax computers is unclear, though PCWorld.com has received a number of complaints from buyers unable to get help with routine problems. Repeated calls to corporate spokespeople have failed to produce more than a "no comment" when the calls are answered at all.

The precise legal relationship between Fountain Technologies and its apparent subsidiaries is murky. However, the companies have had demonstrably close ties in the past. While the companies have maintained separate public identities, individuals who have worked for Fountain have said they also worked for the PC companies.

CyberMax Tech Support Goes Stealth

Judith Grizanti bought a CyberMax computer back in 1998. With a year left on her parts warranty, she recently sought service for a problem. After weeks of trying to contact the company--by phone, fax, e-mail, and regular mail--she says she still has nothing to show for her efforts. She's called at various times of day and has spent more than 20 hours on hold, to no avail. Recent attempts to fax the company yield a "no carrier" error.

"I've never had such an experience in my life," Grizanti says. After trying "every single number they have" and sending countless e-mail messages to all listed addresses for the company, she says, she has yet to talk with a technician.

Back in July--the last time she got through--she was transferred to a tech support line, placed on hold, and cut off before talking with a technician. She subsequently tried the sales department; after 30 minutes on hold, she reached someone who promised to help, but no one called her back. Since then, calls to CyberMax's sales, marketing, and tech support lines have all yielded nothing but hours on hold and an eventual cut-off.

At this point, Grizanti has given up on CyberMax, and has taken her PC to a local repair shop. Grizanti suspects CyberMax's troubles are recent, since she got help from tech support earlier this year without incident.

Fountain Ripples

It's unclear what impact the bankruptcy of Fountain Technologies will have on the PC market, says Roger Kay, research manager at IDC. (http://www.idc.com) The company's overall sales are difficult to gauge because Fountain has traditionally eschewed contact with analysts.

The company is accustomed to "flying under the radar," says Kay, who called Fountain one of the "great stealth companies in the PC ndustry" in a 1998 report. Despite its low profile, Kay estimates that Fountain Technologies has revenues in the billions of dollars. Combine sales from its various presumed companies, and it is a top 20 player in desktops, and may even rank in the top 10, he says.

Competitors tend to view Fountain's various companies as niche layers, according to Kay. "I don't think people have paid attention to Fountain and its tentacles," he says.

Copyright ) 2000 PC World Communications.

-- Bingo1 (howe9@shentel.net), August 23, 2000


I bought a CyberMax computer back in the mid-1990's. They did a nice job. I recommended them to friends, Romans and countrymen.

Unfortunately, I purchased a file server for the company I work for from Quantex last October. Also an excellent 'puter...but there goes the warranty.

-- Bingo1 (howe9@shentel.net), August 23, 2000.

hey Bingo -

good to see you again.

-- (bygrace@thru.faith), August 23, 2000.

Thank you, bygrace. Nice to see you too. One of the bright lights.

-- Bingo1 (howe9@shentel.net), August 23, 2000.

Hey, BINGO is back!!

-- Carlos (riffraff@cybertime.net), August 23, 2000.

yesiree, It sure looks like it is the real Bingo!

-- Maxus Landonis (maxl@bb.ll), August 23, 2000.

Kind of a shame. I'm typing this on a Cybermax, had it for 3 years. They provided a good product and excellent service. Now, how do you go broke in the PC world providing good products and services? Not easy.

-- Flint (flintc@mindspring.com), August 23, 2000.

Their margins had to be slim, Flint. They routinely beat prices of the Dells, Compaq's, HP's, of the world by 15-20% or more. And they used top-quality components. Not much room for error. When RAM shot up in price last fall, they may have taken a bath. Perhaps they negotiated a contract or two which backfired and had to sell units near cost or even a small loss for a time.

Any way you slice it, this is a loss for the average computer buyer. Too bad.

-- Bingo1 (howe9@shentel.net), August 23, 2000.

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