Jordan Azzam, a Baltimore advertising and public relations company, plans to close this week because one of its major clients went bankrupt.
Gary Jordan, one of the partners of Jordan Azzam, said yesterday that his agency is owed more than $85,000 by Stansbury Stereo and Video Centers. Stansbury, a Baltimore-based stereo, video and audio equipment retailer, filed for protection from creditors under Chapter 11 of the federal bankruptcy code on Oct. 12.
Jordan said his company will file under Maryland state law for "assignment for benefit of creditors," a provision similar to a federal Chapter 7 liquidation. This process allows a company to steer clear of bankruptcy court.
"The business literally gives up all its assets to an individual who acts as a trustee and whose job it is to liquidate," said Robert Grossbart, an attorney representing Jordan Azzam.
Grossbart said the company plans to file under the provision in Baltimore City Circuit Court this week.
The firm had to layoff its 18 employees last Friday. At its peak, Jordan said the firm employed 30 people. Its other principal partner is Eugene Azzam.
"We ran a good business," Jordan said. "We did good work but we got caught by a bad economy."
In the court filing, Stansbury listed the total assets for its four stores at $3.7 million and its liabilities as more than $3.6 million. The company's mail order business, International Electronics World Limited Partnership, which also filed for bankruptcy, listed its assets as $436,408 and debt as $265,460.
Bryn Mawr Stereo, a 14-store chain based in suburban Philadelphia, has agreed to purchase the 40-year-old Stansbury chain for about $250,000.
Last week, Bryn Mawr, which has no stores in this area, took over management of the Stansbury's stores, according to Joel I. Sher, an attorney with Shapiro & Olander who is handling the bankruptcy case for Stansbury.
Bryn Mawr is awaiting final approval from the court for the sale.
Sher said it was too early to determine what percentage of its money Jordan Azzam might receive from the liquidation.
"Jordan Azzam was one of Stansbury's biggest creditors," Sher said. "We knew there would be some fallout from our filing."
Founded in 1986, Jordan Azzam had $16.7 million in billings for 1989. The agency served more than 35 local, regional and national clients last year.
In June, the company won a $3 million account with Sylvan Pools of Doylestown, Pa., the leading in-ground pool manufacturer in the United States.
"Fortunately for our clients, there will be no interruption in service to them as arrangements have been made for these accounts to be handled," Jordan said.
Jordan could not elaborate on what "handled" meant. "I can't answer that. But we intend to continue servicing clients, I just can't say how."