Parks' sale delayed again Harris lays blame on unresolved details in financing package

August 23, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

The sale of Parks Sausage Co., which was scheduled to be made final this week, will be delayed at least a week because of unresolved details in the financing package, the prospective owner said yesterday.

Franco Harris, the former football star and Pittsburgh businessman who is buying Parks, blamed the delay in closing the deal -- the second delay so far -- on negotiations between state economic development officials and Banc One, a Columbus, Ohio-based bank that is financing the deal.

Harris said the state will guarantee a portion of the financing, about $1 million. Harris, who wouldn't disclose other details, said the deal was not in danger. "We have the financing," he said.

Chuck Porcari, a spokesman for the state Department of Business and Economic Development, would say only that state economic officials have had talks with Harris and financial institutions that continue.

"Until there are signatures on documents, it's our policy not to discuss the particulars," Porcari said. He added that he saw no "insurmountable hurdles" to the Parks sale.

L Harris said closing will not occur at least until next week.

In a sales agreement filed in federal bankruptcy court, Harris and the current owners of Parks agreed to close the deal by Aug. 5.

When U.S. Bankruptcy Judge James F. Schneider approved the sale last month, Mark Friedman, an attorney for Parks, said the closing would occur by Aug. 20. But he hesitated to commit to a specific date. Friedman, who was on vacation this week, could not be reached for comment. Harris said the new date is Aug. 30.

Raymond V. Haysbert, the Parks chairman who has tried to sell the company for a year, said the delay had left him numb. "They have some letters of commitment, but they can't write a check," he said.

Haysbert said there is another prospective buyer. He said he had not held discussions with the party, whom he would not identify. "I don't want to interject it now because it would look like I'm applying pressure," he said.

Parks closed its doors in May, putting about 220 employees out of work, including 130 at the company's Park Heights plant. The company filed for Chapter 11 bankruptcy protection June 22 as part of a deal to sell the company to Harris. Two days later, Schneider approved an interim plan allowing Harris to reopen the company.

On July 24, Schneider approved the purchase. To make the deal a reality, three creditors are forgiving more than half of $8.2 million in debt. The city, which is owed $2.4 million, will accept $500,000 over 10 years from the company's profits. NationsBank will wipe out a $5.4 million obligation for $3 million. Baltimore Development Corp., the city's economic development agency, has converted a $450,000 past-due debt to a 10-year $400,000 loan.

In addition to assuming $3.8 million in debt, Harris will pay a $1.7 million purchase price. That price will first satisfy obligations for property taxes, bankruptcy fees and the company's pension fund. The remaining amount, plus the proceeds from the sale of a company building in New Jersey, will go to about 500 holders of $2.4 million in unsecured debt.

Pub Date: 8/23/96

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