McMillen investment in trouble $1 million at stake in bankruptcy filing

October 06, 1992|By William Thompson | William Thompson,Staff Writer

Maryland Congressman Tom McMillen stands to lose close to a million dollars in personal investments if a troubled telecommunications business that grew out of the small paging firm he founded does not survive a bankruptcy reorganization attempt.

Officers of American Beeper Associates, also known as Page Plus Regional Messaging Network, filed Chapter 11 bankruptcy papers on Sept. 18 in the U.S. Bankruptcy Court in Alexandria, Va.

On the same day in a related case, similar bankruptcy papers were filed for Pager Communications Corp., the general partner of American Beeper.

Representative McMillen, a Democrat who represents the state's 4th District, is facing a re-election battle against Rep. Wayne T. Gilchrest in the redrawn 1st District, which includes the Eastern Shore, portions of Anne Arundel County and a small part of Baltimore City.

Mr. McMillen owns four of American Beeper's 30 partnership shares, for which he paid $180,000 each. He also has personally guaranteed loans to the firm that could make his total losses "just under or over $1 million," according to a partner who asked not to be identified.

Court documents show that last November Mr. McMillen personally borrowed more than $103,000 from 1st American Bank in Baltimore on behalf of American Beeper.

American Beeper, which sells and operates paging devices, reported no assets and liabilities of $416,366, according to court documents. Pager Communications also reported no assets and listed liabilities of $171,917.

Mr. McMillen said through a spokesman yesterday that he has had little to do with daily company operations since he was elected to Congress in 1986, a year after he founded Page Plus.

"In 1989, I resigned from the board of directors and am no longer an officer in the company," he said. "Obviously, I am disappointed this had to happen. In this economy, a lot of small businesses are finding it hard to get by."

One of Mr. McMillen's partners said American Beeper, which is based in Howard County, has seldom been profitable and all stockholders could lose their money if the companies are not reorganized successfully.

"It's an investment like many others and in times like these, they don't always turn out right," he said.

In this election year, rumors about the bankruptcies quickly took on political overtones, although Mr. Gilchrest's campaign staff declined comment.

Partners blamed the most recent financial problems on a combination of the poor economy and a shoddy performance by a management team hired to run the businesses.

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