UCC arm in receivership

UCC Technologies has put the computer resale part of its business into receivership, leaving a $1.6 million legal battle with Dell Computer in the hands of the receiver.

But managing director Leicester Chatfield said it intended to continue to develop broadband services, despite missing out on the Wairarapa and Northland broadband tenders.

The receivership came after listed company Newcall Communications pulled the plug on its purchase of UCC. Newcall chief executive Jim Bracknell cited the tender failures and Dell action.

Newcall wanted UCC because its agency selling Dell equipment to the tertiary sector offered a steady source of revenue, and its broadband plans, driven by Radionet founder Chatfield, provided a basis for growth. Both complemented Newcall's sole remaining business, internet provider Iprolink.

However, when Dell's New Zealand manager, Ross Allen, left in November of 2001, his Australian replacement told the universities to buy from Dell direct. UCC's revenues dropped from more than $1 million a month to mere thousands.

In November 2002, as UCC was finalising its sale to Newcall, Dell sued it for $680,000 in unpaid bills.

UCC countersued for $1.6 million, alleging Dell had reneged on a formal partnership.

By killing the Newcall merger, Dell's legal action could also have affected UCC's chances in the broadband tender because the company was unable to prove to the satisfaction of the regions it could deliver on its technology promises. Dell would not comment because the case was before the courts.