Hooker Seeks Provisional Liquidator
SYDNEY, Australia (AP) _ Hooker Corp., owner of retail and real estate holdings in Australia and the United States, Wednesday applied for a provisional liquidator after failure of a financial rescue.
The Sydney-based holding company owes the equivalent of more than $1.2 billion to 42 banks, which on Tuesday refused to grant the company any more credit, forcing Hooker to seek a liquidator to take charge of the company.
A collapse of Hooker, which owns B. Altman & Co., Bonwit Teller plus other U.S. department stores and shopping malls, would be one of Australia’s biggest corporate crashes.
The company said it asked the Supreme Court of New South Wales to appoint John Harkness of the accounting firm Peat Marwick Hungerfords as the provisional liquidator.
Hooker said its directors believe their ″action in standing aside will resolve the impasse with the banks and is therefore in the best interests of employees, creditors and shareholders.″
The provisional liquidator will have wide powers over all aspects of the business, Hooker said, including the sale or retention of assets, raising additional funds if required and employment.
Directors will fully assist in facilitating the changeover of the company’s affairs into the hands of the provisional liquidator, Hooker said.
Hooker’s assets totaled about $1.8 billion and its liabilities were $1.4 billion as of March 31.
In the United States, besides B. Altman & Co. and Bonwit Teller, Hooker controls Sakowitz Inc., Parisian Inc. and Merksamer Jewelers Inc. It has interests in shopping malls, commercial real estate and house building.
People familiar with Hooker’s U.S. operations said that the First National Bank of Chicago has started foreclosure proceedings on Hooker’s Richland Fashion Mall in Columbia, S.C., the Wall Street Journal reported Thursday.
J. Frank Haasbeek, president of L.J. Hooker Corp., the U.S. subsidiary of Hooker, was unavailable for comment on the report.
The company in May announced plans to sell assets to reduce debt. That followed cash-flow problems in the United States that caused Hooker to fall behind in payments to several apparel and other suppliers.
In June, Hooker’s financial difficulties appeared to become more serious and the company hired Richard Grellman of Peat Marwick as a financial adviser. The company conceded it had a liquidity problem and said some banks had cut credit lines. Directors blamed rising interest rates, an economic slowdown, a weaker Australian dollar and adverse publicity for the problems.
Hooker’s 42 Australian and foreign lenders had agreed, until Tuesday’s announcement, to forgo loan repayments and to keep credit lines open while the company worked out a plan to sell more assets under controlled conditions, rather than in a fire-sale. George Herscu, who owns about 50 percent of Hooker, resigned as chief executive on July 11, but has stayed on as chairman.