Conditions of the sale stipulated that Hartford’s purchase was “free and clear of three recorded bank liens”.
Although privately-held Argus reportedly had sales of $28 million in 2002, the company was burdened with substantial debt. There was said to be about $4.2 million in secured debt to Bank One and the Sequel loan company, plus $5 million in unsecured debt. Reports say Argus was trying to get a new lender, sell equity, or sell the company for the past six months.
Argus attorney Daniel Zazove told the press that the sale of company assets would pay an estimated $1 million to Bank One and $2.6 million to Sequel.
William Pearson, president of the former Argus company, blamed Argus’s financial problems on slow payment by the Office Max chain, Bank One’s lack of
flexibility regarding its loan to the company, and continuing pressure to cut prices in the highly-competitive camera business. In June Argus filed a lawsuit against Office Max, seeking $2 million in damages. Before the sale, Pearson said that despite Argus’s financial problems, he expects sales to top last year’s. “The buyer of this business will be very lucky”, he stated.
After the sale, Pearson told reporters that Hartford plans to retain Argus as an independent division, with the current product line remaining in place. He will remain as president of the newly created division, he added, but said some Argus employees, primarily in accounting and warehousing, will lose their jobs. The company had been employing about 25–28 workers.
Pearson became president of Argus in 1991 after purchasing it from Concord Camera Corporation, where he was then an officer. (This followed Concord’s purchase of Argus for about $2 million in 1990.) At that point the Argus camera line was 35mm models, primarily sold through direct mail and major retail chains, including Sears Roebuck & Co. and Montgomery Ward Inc. In 1998 Argus added digital cameras, concentrating on lower-end products such as key-chain USB cameras and value-priced megapixel digicams. Currently, digital cameras make up 85 percent of the company’s product line, Pearson said, adding that Argus is the sixth-largest supplier of low-end digital cameras in the U.S. market.