Harris gets court's OK to reopen Parks Bankruptcy judge clears way for plant to resume operations

More Parks Sausages, soon

Buyer says ex-workers face re-evaluation before being rehired

June 25, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

A federal bankruptcy judge yesterday approved Franco Harris' plans to re-open Parks Sausage Co. while a deal to sell the Baltimore company to the former football star becomes final.

Harris said he will use an undetermined amount of cash to reopen the Park Heights plant, possibly within one week.

He said that none of the roughly 130 to 140 people formerly employed at the company's Park Heights plant is assured of employment.

"I guess I can say that we are starting anew," Harris said. "We're lucky Parks has qualified people. But we're starting anew. We would like to have a whole new direction and a whole new attitude."

Parks Sausage Co., which closed May 24 when it ran out of money, filed for Chapter 11 bankruptcy protection Friday as part of a deal to sell the company to a group led by Harris. Parks, the city's largest black-owned manufacturer, will file the terms of its agreement with Harris' group later this week, lawyers for the company said. Yesterday, United States Bankruptcy Judge James F. Schneider signed a series of orders which will allow Parks to get financing from Harris' company, Parks LLC, and to use its bank and payroll accounts to run the business. Technically, the current owners will be in charge.

Schneider, who also scheduled a July 24 hearing to consider the Parks sale to Harris' group, called the business "absolutely vital" to Baltimore. "We will do what we can to accommodate this case, because you've got some priority," he said. Parks, which posted $20 million in sales in its most recent fiscal year, said in its court filing that the company has nearly $12 million in assets and nearly $11.8 million in total liability.

The liability includes about $8.7 million of secured debt. That includes about $2.4 million from a federal loan owed to the city, $400,000 from an emergency loan owed to the Baltimore Development Corp., $5 million owed to NationsBank and about $900,000 held by other creditors not identified in the filings.

More than 500 parties account for $2.1 million of the unsecured debt. The creditor owed the greatest amount of money is Baltimore Gas and Electric Co. Parks owes the utility $505,382.

During the 90 days prior to Friday's bankruptcy filing, Reginald Haysbert, Parks' president, was being paid at the rate of $100,000 a year and his father, Raymond Haysbert, Parks' chairman, was paid at a rate of $35,000 a year. The elder Haysbert owns 97.5 percent of the stock and the son owns the remaining 2.5 percent, according to court filings.

In a June 21 letter to employees, Raymond Haysbert said the sale to Harris' company "will permanently terminate your employment relationship at the Baltimore facility."

Harris said he plans to re-evaluate every former employee of the lTC Baltimore plant before rehiring them.

"My criteria has never been seniority, it's always been performance," he said.

"We might want them to learn things differently, to look at things in a completely different way from how they have been done."

Harris said he would determine how much money the company will need to re-open after surveying Parks customers. Mark Friedman, Haysbert's lawyer, said the amount will be between $225,000 and $575,000.

Summer is generally a slow time for the industry, Harris said, so he will focus on gearing up for the fall.

Asked how he would treat Parks' contract with Local 27 of the United Commercial Food and Commercial Workers union, Harris said the company's bankruptcy "dissolves all contracts."

But he said he was not interested in running a nonunion business or in wage cuts. "We'll be talking to the union," he said.

Joel Smith, an attorney for Local 27, said bankruptcy does not give the company the right to "summarily" dissolve the union's contract. "We intend to enforce all statutory and contractual rights of employees who have contributed to the business with sweat and hard work for years," he said.

Harris also said his deal with the Haysberts involves debt forgiveness, but he didn't identify specific creditors. He also said state economic development officials are involved in the deal, but would not define their roles.

Under Harris, Parks will consist mostly of the Baltimore facility. Without being specific, Harris said he was less interested in distribution facilities in Connecticut, New York, New Jersey or Pennsylvania, which employed about 70 people.

"From the start we felt that the whole operation as it stood could not have survived," Harris said.

Pub Date: 6/25/96

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