Four creditors have filed an involuntary bankruptcy petition against co-op marketer Larry Tucker, Inc. But the Saddle River, NJ firm is continuing with its mailing plans, and expects to convert the case to a voluntary Chapter 11 filing, said founder Larry Tucker.
The petition, filed on Jan. 22 in the U.S. Bankruptcy Court for the District of New Jersey, Newark, seeks the firm’s liquidation. The creditors-Gulf Envelope, Husky Envelope Products, American Mail-Well, Inc. and American Spirit Graphics Corp.-are owed an aggregate sum in the high six figures, said Suzanne Miller, vice president of finance and administration with American Spirit, a Minneapolis-based printer.
“There was no response, and an apparent inability to pay,” Miller commented. “We’d like to know that all assets have been taken into consideration.”
Tucker said that his firm has not yet been served with the papers, and that he heard about the filing last week while visiting American Spirit headquarters.
He added that his company has secured new financing from an existing lender, and plans to increase volume on several co-ops, including Young Families and Active Adult. Tucker mails roughly 30 million co-op envelopes per year, and expects volume to double its volume in the second half of 1999. Annual sales are in the $12-15 million range.
Conversion of the filing to a voluntary Chapter 11 would allow the company to reorganize under court protection.
According to Tucker, the firm’s problems began in 1996 when a major client, home-improvement marketer Amre, discontinued its license to use the Sears name. Response declined, and Amre closed its doors, causing Tucker to lose $3 million in budgeted revenue, he said.
Tucker added that the firm cut costs in response to that setback, and that sales are now robust. He estimated his firm’s total debt at around $3 million.
“The filing is an exercise in dealing only with the past, and not with issues that suggest the future,” he said. “We will reorganize and be a stronger company.”
Attorneys for American Mail Well, Englewood, CO, would not comment on the case.
Each of the four creditors is owed in the low six figures, according to Fuller. Except for American Spirit, all are envelope suppliers.
Gulf Envelope is based in Dallas, and Husky Envelope Products in Walled Lake, MI.
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