Smith Corona Files for Bankruptcy
CORTLAND, N.Y. (AP) _ Office supplier Smith Corona, once one of America’s leading makers of typewriters, filed for bankruptcy protection Tuesday and agreed to sell its assets to Carolina Wholesale Office Machine Co. for about $6 million.
It is the second time in five years that the troubled 97-year-old company has sought protection from its creditors under federal bankruptcy laws. Last month, Smith Corona was dropped from the Nasdaq stock listings.
``We are pleased that Smith Corona’s business will continue under the auspices of a respected office machine distributor,″ said Martin D. Wilson, Smith Corona’s newly appointed president and chief executive.
``We believe that the asset purchase agreement represents our best course of action to realize the value of Smith Corona’s assets for the benefit of the company’s creditors,″ he said.
The purchase agreement calls for Carolina, a leading wholesale distributor of office equipment and supplies, to acquire Smith Corona’s inventory, accounts receivable, intellectual property, equipment, dies and molds and certain contracts and licenses, said Rivian Bell, a company spokeswoman.
Bell said the voluntary bankruptcy filing, which was made in Delaware, will facilitate the purchase agreement. The agreement is subject to bankruptcy court approval.
The filing listed $14.4 million in liabilities and $12.4 million in assets.
Carolina, based in Charlotte, N.C., plans to organize Smith Corona as a separate operating entity and focus on its core typewriter and supplies products, said Larry Huneycutt, Carolina’s president.
Smith Corona _ which traces its roots to the L.C. Smith & Bros. Typewriter Co. founded in Syracuse in 1903 _ stopped making products when it emerged from Chapter 11 bankruptcy proceedings in 1997. The firm’s subsequent transformation from a manufacturer to seller has been difficult.
In April, Nasdaq told Smith Corona its shares could no longer trade on that stock market because the company had slipped below its financial requirements. It was the second time in four years an exchange dropped the company’s stock. In June 1996, the New York Stock Exchange delisted the stock after Smith Corona’s 1995 bankruptcy reorganization plan proposed making the stock worthless.
``Despite tremendous efforts over the past five years, it became clear that Smith Corona could no longer continue to operate as a stand-alone business,″ Wilson said.
Although its annual revenues total about $30 million, Smith Corona has lost more than $20 million since the beginning of 1999. Its payroll, which topped 1,100 before its first bankruptcy filing in 1995, now totals 43 employees.