Tandycrafts Files for Bankruptcy
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FORT WORTH, Texas (AP) _ Home-decor retailer Tandycrafts Inc. has filed for Chapter 11 bankruptcy protection after it failed to refinance its debt or get an extension on its credit.
Tandycrafts, once a member of the same corporate family as RadioShack, lost $19.7 million last year and it stock plunged from $26 per share in 1993 to below $1 before it was delisted last week by the New York Stock Exchange.
The Fort Worth-based company filed for bankruptcy protection Tuesday in U.S. Bankruptcy Court in Delaware, saying it owed about $32 million in secured debt to Wells Fargo and Bank One.
The company listed $64.6 million in assets and nearly $53.4 million in liabilities in its bankruptcy petition. Josephine Garrett, a Fort Worth attorney specializing in bankruptcy, said companies with more assets than liabilities sometimes file for protection to prevent seizure of property to settle a debt.
The filing follows a string of divestitures by the company, which was created in 1975 when Tandy Corp. spun off its non-Radio Shack operations. Tandycrafts grew into a wide-ranging company that sold everything from leather goods to home-improvement products.
Last year, Tandycrafts faced a proxy challenge from unhappy shareholders that resulted in the dissident shareholders gaining three seats on the board of directors.
This month, Tandycrafts said it would exit its unprofitable framed-art business and focus solely on its profitable picture frame-manufacturing business. It previously sold its Cargo Furniture unit to Pier 1 Imports.
The company has about 1,700 employees, including 60 at its Fort Worth headquarters, which has been on the market for several months.
Leo Taylor, senior vice president of finance, said the company is not planning any layoffs at its four Arkansas plants. The company also will continue to make frames in Durango, Mexico, but is closing its framed art business at that facility.
The company’s stock, traded over the counter, closed unchanged Wednesday at 4 cents a share.
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