Teetering on the edge of insolvency, the struggling Parks Sausage Co. yesterday said that it has found its rescuers: two investors with close connections to TLC Beatrice International, the nation's largest black-owned business.
"A deal to keep Parks Sausage in Baltimore and to keep the organization in the hands of African-American entrepreneurs is imminent," said Raymond V. Haysbert Sr., the chairman of Baltimore's largest black-owned manufacturer.
Founded in 1951 by Henry G. Parks Jr. in an abandoned dairy plant near the junction of Pennsylvania and North avenues, the company with $20.5 million in annual sales is famous for its slogan, "More Parks Sausages, Mom . . . Please."
The possibility of the city's best-known black-owned enterprise foundering with the loss of 220 jobs in the inner city had sent city development officials scurrying to help to keep the company afloat.
With Mayor Kurt L. Schmoke and Housing Commissioner Daniel P. Henson III sitting beside him yesterday at a news conference at the company headquarters, Mr. Haysbert said the sausage company has a letter of agreement with W. Kevin Wright, former general counsel to TLC Beatrice, and Anthony S. Fugett, a member of TLC Beatrice's board of directors and a brother of the late Reginald F. Lewis, who headed the giant international food company until his death in 1993.
Ironically, Mr. Lewis had tried to buy Parks in 1975 as one of his first acquisitions. "They were under 30 [years of age] and frankly, we didn't believe they could do the deal," the 75-year-old Mr. Haysbert said.
Almost no details of the deal were disclosed. But it does include a stipulation that the company's headquarters and its 220-person work force remain in Baltimore, Mr. Haysbert said. "The jobs and company will be headquartered here and they will be retained," he said.
The deal, which Mr. Haysbert said may be closed by Sept. 30, comes as the debt-burdened company is strapped for cash and had to get a line of credit from the city this month in order to stay solvent.
"The short-term $400,000 line of credit that was extended by the mayor and the commissioner [Mr. Henson] is the reason why we are open today," Mr. Haysbert said.
For the fiscal year that ended June 30, the company lost about $1 million, Mr. Haysbert said.
The city will continue to help Parks, by subordinating a $2.4 million Urban Development Action Grant it made to the company in 1988 to any new debt that the corporation may take on. This means the city would be the last to be paid in the event of bankruptcy. Mr. Henson said the city also may discuss deferring payments on the debt.
The loan was made to help Parks move from its Russell Street site -- now part of Oriole Park at Camden Yards -- to its $16 million plant in the Park Circle Business Park.
'Earned my retirement'
That 133,000-square-foot factory, built in 1990, turned out to be a drag on the company because it was twice as big as the company needed. After the move, the company lost about a third of its business when two large customers -- Pizza Hut and Domino's Pizza Inc. -- shifted to lower-cost sausage makers.
If the deal is completed, Mr. Haysbert will limit his role to being a director and consultant. "I think I've earned my retirement," he said.
Despite the buyers' close connections to TLC Beatrice, which primarily operates in Europe, the giant food company will not be involved in the deal, Mr. Wright said. When asked if there were other groups or individuals backing the deal, Mr. Wright ended the news conference saying, "I think that's enough."
Both men were very guarded about giving out any information.
Mr. Wright, 41, a resident of Plainfield, N.J., is a lawyer with the New York office of the law firm of Winston & Strawn. He also heads the Michu Corp., which he described as a "personal vehicle through which I make investments." Asked what the holdings consisted of, Mr. Wright replied, "They're limited."
According to biographies distributed at the press conference, Mr. Wright was senior vice president, general counsel and secretary and a member of the management committee of TLC Beatrice.
As counsel to a company with $1.8 billion in revenues, Mr. Wright played a key role in TLC Beatrice's sale of about 20 companies for a total of approximately $1 billion.
Mr. Fugett, 42, is president and chief executive officer of ASF Systems Inc., a 12-person computer equipment company in the 1500 block of E. North Ave., according to the American Business Information directory. The 6-year-old company's annual sales are between $2.5 million and $5 million, the directory said.
James T. Brady, secretary of Maryland's Department of Business and Economic Development, who knows Mr. Fugett, said the company distributes IBM equipment.
'First-class system'
"It's a successful company," Mr. Brady said. "He seems to have a first-class system."
