Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 2, 1990 TAG: 9003022909
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Medium
The Independence company, employing about 250 people, reported debt of $38.6 million and assets of $27.3 million in papers filed in Bankruptcy Court in Roanoke.
However, new financing with a $1.6 million line of credit has been arranged with Meritor Financial Markets of Philadelphia, the company's largest creditor, said John Urmston, chief operating officer. Meritor said $14.8 million of its loan of $18 million 2 1/2 years ago is unpaid.
Urmston said Nautilus will be "better off, coming out cleaned up from debt" after reorganizing in court. Production continues, he said, and "it is unlikely that our customers will notice any changes in our operation and services."
The Dallas Cowboys, Ohio State University and hospitals across the country are among customers of Nautilus.
In an unusual procedure, Nautilus filed a disclosure and organization plan with its initial petition. The plan provides for payments to Meritor and Prudential Life Insurance, the major unsecured creditors, full payments to trade creditors and 25 percent for general claims. Prudential has a claim of $12.4 million. The creditor list has more than 700 names.
The company, owned by Travis Ward of Dallas, cut its employment at Independence and a smaller plant at Mexia, Texas, in the past year. Urmston said he did not know the number laid off at Independence but he hopes they will be recalled if the court approves the plan "and we come out recapitalized." He has offices in Dallas but has been in Independence this week.
Nautilus has kept its rank among the top three makers of exercise equipment, he said, but the market is smaller and more companies are competing.
Nautilus reported secured debt of $27.7 million owed three financial companies. It blamed its financial problems on continued cash drains from a television production operation in Florida; substantial costs of business litigation unrelated to product liability; disputes over commissions and discounts with distributors; and increased competition.
Meritor has filed suit to collect its debt from Nautilus and foreclose on its lien of $27.9 million on the company's assets.
Plenty of people are interested in buying the company, Urmston said, "and I believe we may have to pass out numbers" when buyers start submitting plans to the court. The Bankruptcy Court must approve "the best plan that will satisfy the creditors," he added.
The court set a hearing on the disclosure statement April 9 at 10 a.m. in Roanoke.
by CNB