3 creditors suing to put Leedmark into bankruptcy Store owes them $268,000, they say

November 05, 1993|By David Conn | David Conn,Staff Writer

Unsecured creditors of the failing Leedmark store in Glen Burnie, afraid of being ignored as the store heads toward a January closing, filed suit in federal court to force the company into involuntary bankruptcy.

Two Baltimore companies and one in Louisiana, claiming they are owed a total of $268,000, filed the petition Tuesday with the U.S. Bankruptcy Court in Baltimore in an effort to force G. B. Glenmark Ltd. Co. into a liquidation under Chapter 7 of the bankruptcy code.

If the court grants the creditors' petition, it will appoint a trustee to oversee the Leedmark store's liquidation and the orderly payment of the proceeds to creditors.

"The intention is to make sure that the liquidation of the remaining Leedmark assets is conducted in a proper manner . . . and that one creditor is not treated more fairly than another," said attorney Kenneth F. Davies, who filed the petition.

A spokesman for G. B. Glenmark said yesterday the company has hired a retailing liquidation consultant, KMR Management of Glenside, Pa., and plans to fight the bankruptcy petition.

"You cannot get blood from a turnip," said spokesman Edward Segal. "We have retained experts skilled in realizing maximum value in the disposition of assets of financially troubled businesses, and are currently operating pursuant to a plan developed in consultation with those experts."

The three companies that filed the petition are Century Graphics Corp. of Metairie, La., which claims it is owed $57,262; Graphic Technologies Inc. of Baltimore ($173,607); and Panasonic Co., a Baltimore-based subsidiary of Matushita Electronic Corp. of America ($37,144).

Leedmark, whose French-owned parent company, the Leclerc Group, has tried unsuccessfully to sell Americans on the "hypermarket," announced Monday that it had stopped ordering merchandise and would close the store in January.

At 275,000 square feet -- twice the size of a typical Wal-Mart -- the 30-month-old Leedmark offered 85,000 items, everything from groceries to clothing to electronics.

Thirty-six top Leedmark managers were laid off Monday. An additional 122 employees will be laid off Monday, Mr. Segal said. That will leave a "skeleton crew" of about 140 people to run the store until its planned closing Jan. 15.

"Taking this matter to court will do nothing but cause both sides to waste their time, effort, and resources on a needless legal battle," Mr. Segal said. "Forcing Leedmark into bankruptcy will not help our unsecured creditors, since all of its assets are pledged to cover bank loans." The company's banker is Signet Bank/Maryland, according to a lien filed with the state in March.

"Neither will it help our employees, whose vacation and severance pay could also be placed in jeopardy," Mr. Segal added.

Graphic Technologies and Panasonic sued G. B. Glenmark in Anne Arundel County court last month, seeking payment of the money owed them. But with news this week that the store would close, they decided to press the involuntary bankruptcy, said Bill Harrison, president of Graphic Technologies.

"It just got to the point where the people at Leedmark were not at all forthcoming with information," he said. "The entire time we were talking to their people about past due amounts, they never seemed to articulate a plan" for paying the debts.

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