New World Pasta Files for Chapter 11
HARRISBURG, Pa. (AP) _ New World Pasta, the nation’s largest maker of dry pasta products, on Monday announced that it filed for Chapter 11 bankruptcy protection.
The company, which is struggling with high debt and internal accounting problems that cropped up soon after it purchased one of its largest competitors, also announced that it obtained a commitment for a $45 million in financing that would allow it to operate while in bankruptcy.
The company said the filing in the U.S. Bankruptcy Court for the Middle District of Pennsylvania would give it time to reorganize and reduce its debt, strengthen its financial position and restructure its balance sheet.
New World Pasta, whose boxed-pasta brands include Creamette, Prince, Ronzoni, and San Giorgio, has not posted a profit since 2001 and has not filed a quarterly financial statement with the SEC since mid-2001.
``We expect our core business activities to continue unimpeded,″ said Wynn Willard, the company’s chief executive. ``We will manufacture and ship our products in the normal course, and our consumers will continue to enjoy our great products on a daily basis.″
In late 2002, the company warned that computer network problems had rendered its financial statements unreliable.
In February, it released preliminary results for 2002 and 2003 showing that it has failed to reach the $510 million in combined sales that it hoped its 2001 acquisition of a major competitor, Borden’s pasta division, would yield.
New World’s stock is privately held, but it has publicly traded bonds.
On the Net:
New World Pasta: http://www.newworldpasta.com