Techonology : Leading Edge Will Be Sold to Daewoo Telecom Ltd.

CANTON, Mass. —  Leading Edge Products Inc., a maker of IBM-compatible computers that is in bankruptcy, said Wednesday that it will be bought by the company that makes virtually all its products: Daewoo Telecom Ltd. of South Korea.

Under a plan that must be approved by federal bankruptcy court in Boston, Daewoo will acquire privately held Leading Edge by assuming its estimated $16 million in liabilities, said Leading Edge Senior Vice President John Sullivan.

The company’s dealers, who are the vast majority of its creditors, will be paid back in cash within five years. If they choose to be paid in Leading Edge products, they will receive full payment within four years.

The plan also allows dealers to accept an immediate settlement of 45 cents in cash and product for each dollar owed. Other creditors, mostly suppliers, will also receive 45 cents on the dollar, the company said in a statement.

Sullivan said the plan “assures that Leading Edge will continue to be a significant player in the personal computer market.”

Leading Edge was founded as a distributor of computer peripherals by Michael Shane, whose first business success came in the wig and blue jeans industries.

In 1983, the company marketed the first low-priced “clones” of personal computers by International Business Machines Corp., broadening access to the powerful machines and related software.

Leading Edge filed for protection under Chapter 11 of the U.S. Bankruptcy Code in February because of insurmountable cash-flow problems. The company, which required its dealers to pay for their orders in advance, was unable to deliver the products and suspended shipments.

Leading Edge’s headquarters will remain in Canton, Sullivan said. Canton houses the company’s research, sales, marketing and other operations, although its manufacturing facilities are in South Korea.