Parks' debt revised upward Figure now estimated at $10 million, but chairman optimistic

June 06, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

If Pittsburgh businessman Franco Harris reaches a deal to buy Parks Sausage Co., it apparently will be after resolving what to do about a debt of some $10 million, or $2.2 million more than previously estimated.

Even so, for the first time since Parks closed May 24, Chairman Raymond V. Haysbert Sr. says he is "optimistic" about prospects for an agreement with Harris.

As the shutdown, which the company said affected 219 workers, approached the two-week mark, grocery stores began to sell the last of their Parks products.

All of Landover-based Giant Food stores had either sold out yesterday or would sell out today, Giant spokesman Barry Scher said.

"There's no more in the pipeline," he said.

Lawyers for Parks and for Harris began what they said was final work on the deal last Wednesday, when Harris' lawyers met with city officials, NationsBank officials and Parks' lawyers.

Haysbert, who had been skeptical, said if the deal were going to collapse, it would likely have done so already. "The lawyers are still arm-wrestling over documents," he said Tuesday.

In another promising sign, Lydell Mitchell, Harris' partner and a former Baltimore Colt, yesterday visited the Parks plant in the Park Heights section of the city.

Neither Mitchell nor company officials could be reached to comment on the purpose of the visit.

Parks, a privately held company, owes the city $2.8 million and NationsBank roughly $5 million.

But the company's debts to vendors, suppliers and utilities, and its unpaid property taxes, boost the total to $10 million, said Mark Friedman, an attorney for Parks.

Analysts have said a $7 million debt is too high for a company like Parks, which posted $20 million in sales during its last fiscal year.

NationsBank officials have said they would work with the company.

Baltimore Mayor Kurt Schmoke said he wants to restructure the debt for the new buyer.

"Thankfully, there's been a fair degree of patience" by creditors during negotiations, Friedman said. The posture of the remaining creditors is not clear.

One creditor, the Baltimore advertising agency Trahan, Burden and Charles Inc., sued Parks in Baltimore City Circuit Court on Monday, saying Parks owes it more than $120,000 for work done in 1995 and 1996. Lawyers for the ad agency didn't return calls requesting comment on the suit.

Ira Cooke, one of Harris' attorneys, said he wasn't surprised by the $10 million figure.

"Whatever the numbers are, they haven't changed," he said. "We're dealing with it. We're making progress."

According to a report by Dun & Bradstreet Information Services, Parks' financial troubles didn't occur overnight.

After giving the company a "good" rating in July 1993, D&B said in July 1995 that Parks had "limited" credit worthiness.

Last November, without information from the company, D&B stopped rating Parks. According to the report, Parks was an average of 33 days late paying its bills.

Despite Parks' struggles, companies that do business with Parks said they would try to remain supportive.

Dave Dawson, a spokesman for Miami-based Ryder System Inc., which leases trucks to Parks, would not discuss details of the company's financial relationship with Parks. But he said he hoped the 45-year-old, black-owned company would survive.

"Generally speaking, they've been a good customer," he said. "And it's a landmark kind of business."

Scher, the Giant spokesman, said the stores would realign their shelves to fill Parks' space while production is down. He said the company would welcome Parks back if production resumes.

Scher also said he thought other stores would do the same.

Pub Date: 6/06/96

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.