Another early Tramiel/Kapp venture: Jay-Man Distributors, Inc.
Jay-Man Distributors, Inc was a Jack Tramiel and Manfred Kapp business that was founded on June 19, 1962 in New York, New York, USA. As can be seen in this advertisement from June, 1963, Jay-Man was billed as an “Office Equipment Supermarket”. I speculate that the Jay-Man name was derived from the combination of the first letter of Jack Tramiel’s name and the first three letters of Manfred Kapp’s name, however I’ve never seen any documentation to substantiate this speculation.
The address listed in the Jay-Man advertisement is 648 Broadway, which was also the address of Commodore’s United States based subsidiary, Commodore Business Machines, Inc., in the early 1960s. You can see the 648 Broadway address on this warranty registration card that came with a 1960 Commodore model 650 typewriter.
When Jay-Man was formed in 1962 Commodore already had a strong retail distribution channel in the United States through their leased office equipment sales departments located in New York area Macy’s department stores. Given this, it’s not immediately obvious why Jay-Man was formed. What we do know is that Jay-Man was one of many Commodore-related entities mentioned in the Canadian Government’s Report of the Royal Commission Appointed to Inquire Into the Failure of Atlantic Acceptance Corporation, Limited.
Atlantic Acceptance Corporation
So what was Commodore’s relationship with Atlantic Acceptance Corporation? In Commodore’s early years the company was fortunate to receive substantial orders for its Czech typewriters from Toronto’s two largest department stores, the T. Eaton Company Limited and the Robert Simpson Company Limited. To fulfill these orders, Commodore required enough working capital to purchase the inventory. Commodore initially turned to a factoring company named Inter-Provincial Commercial Discount Corporation Limited for financing. Factoring companies essentially purchase a company’s accounts receivable at a discount. This allows the factoring company to make a profit by eventually collecting the full amount of the receivables and it allowed Commodore to collect its receivables immediately rather than waiting for payment, albeit collecting less than the full amount.
With capital being a critical need for the fledgling Commodore enterprise, Jack Tramiel sought out better financing terms with the Czechoslovakian State Bank but was unable to meet their guarantor requirements. Tramiel then sought financing from Douglas R. Annett of Annett & Company who was also not able to help, but he did introduce Tramiel to a man named C. Powell Morgan who was the head of Atlantic Acceptance Corporation – a finance company located in Ontario, Canada. Morgan was interested in moving Atlantic Acceptance into the factoring business and Jack Tramiel was seeking a new factoring company with more favorable terms. Thus was formed Commodore Sales Acceptance Limited on March 4, 1959 with Commodore Portable Typewriter Company as its first customer. Commodore Portable Typewriter Company also had a 25% ownership stake in Commodore Sales Acceptance Limited. Through his negotiations with Morgan, Jack Tramiel not only found a new factoring company to finance his ventures, he was also partially in control of the new factoring company.
Jay-Man’s role in the Commodore/Atlantic Acceptance saga
The overall Commodore and Atlantic Acceptance saga was enough to fill several hundred pages of a Canadian government inquiry, but Jay-Man’s documented role in the overall relationship was fairly simple.
- Commodore Factors (a wholly-owned subsidiary of Commodore Sales Acceptance set up in the state of New York to handle factoring and commercial loans in the United States) was loaning money to Jay-Man Distributors to allow Jay-Man to purchase inventory from Commodore Business Machines. To summarize: a Tramiel/Kapp company was borrowing money from another Tramiel/Kapp company to purchase product from yet another Tramiel/Kapp company.
- On October 31, 1964 a company named Analogue Controls, Inc sold $300,000 of machine parts to Jay-Man Distributors. It was perhaps not coincidental that October 31 was the last day of Analogue’s fiscal year. Analogue Controls, Inc was a New York based manufacturing company that Commodore had purchased in 1963 to manufacture the Commodore Drycopy copying machines. These machine parts were in a warehouse/manufacturing facility shared by Commodore Drycopy and Analogue controls. Jay-Man never physically took possession of the machine parts, but Jay-Man’s address on the invoice was shown to be 200 Frank Road, Hicksville, New York – the address of the Analogue warehouse. On February 1, 1965 Jay-Man sold the machine parts back to Analogue Controls for the same amount of $300,000. It is believed this was done solely to show increased revenue for Analogue Controls for fiscal year 1964.
- On December 1, 1964, Jay-Man Distributors purchased copying machines and parts from Commodore Drycopy for $524,265.31. Jay-Man paid this by assuming that amount of Commodore Drycopy’s debt to another Tramiel/Kapp enterprise named Baronet Associates, Inc. This made Jay-Man Distributors responsible for repayment of a loan which had been advanced to Baronet Associates by Commodore Factors, Inc. Jay-Man had no assets with which to repay this loan. In fact, its April 1965 income tax return showed that Jay-Man was in debt to the tune of over $800,000. To summarize: a Tramiel/Kapp company sold parts to another Tramiel/Kapp company which paid for those parts by assuming the obligation to repay a loan that had been made by yet another Tramiel/Kapp company.
The aftermath for Jay-Man
When Atlantic Acceptance Corporation collapsed in 1965, it threw all of Jack Tramiel and Manfred Kapp’s business enterprises into complete disarray. Jay-Man ceased operating but still existed as a legal corporate entity until it was dissolved by proclamation of the New York State Department of Taxation and Finance on December 15, 1970.