Spreckels Seeks Chapter 11 Protection
SAN FRANCISCO — Spreckels Industry Inc., the parent company of California’s Spreckels Sugar Co., has filed for Chapter 11 bankruptcy protection.
Spreckels defaulted on the debt from a 1987 management-led buyout of the company that was financed by Amstar Corp. of New York.
Spreckels has assets of $188 million and liabilities of $185 million, according to records filed Thursday in bankruptcy court.
Under a reorganization plan, debt holders will control the company while operations at Spreckels Sugar and Duff Norton Co. Inc., the company’s two subsidiaries, will remain unchanged, said Pat Murphy of Murphy Weir & Butler in San Francisco.
“The recession, drought and (sugar-beet) disease have all combined to get the company into trouble. What really needs to be done is to de-leverage the company,†said Murphy, an attorney for the holding company. “The work on improving operations has largely been done.â€
Problems began mounting when Spreckels missed payments to Citibank last spring, Murphy said.
The Pleasanton, Calif.-based Spreckels Industries lost $19.2 million in 1992, compared to a loss of $3.7 million in 1991 and a profit of $8.4 million in 1990.
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