NEW YORK — Crystal Brands Inc., which has been selling off pieces of its business for the past couple of years trying to turn a profit, filed a Chapter 11 petition late Friday in bankruptcy court here.
Crystal Brands filed along with 11 subsidiaries with aggregate liabilities of $365.9 million and total assets of $110.4 million.
Liabilities include $273.7 million in secured debt and $3.8 million in unsecured debt. The company has been operating without any trade credit for some time.
According to the petition, Crystal Brands initiated discussions with its institutional lenders last October on a prepackaged Chapter 11 plan but talks broke down this month.
The plan would have converted all but $100 million of its debt to 95 percent of the equity in the reorganized company. As of Jan. 6, the firm was in default of $269 million in debt. Also, the firm noted, it has $93 million in principal payments due in 1995.
“Crystal Brand’s operations do not generate sufficient cash with which to meet its working capital needs,” the petition said.
The petition added that the company has lined up $75 million in secured debtor-in-possession financing.
The case has been assigned to Bankruptcy Judge Prudence B. Abram.
The petition was filed after the closing of the New York Stock Exchange, where the stock on Friday gained 1/16 to close at 11/16.
Crystal Brands, based in Southport, Conn., had been riding a liquidity crisis since January 1992, forcing the company to sell off various operations to raise cash. In 1992, it sold its 50 percent interest in Lacoste Alligator S.A., terminated its Lacoste licensed rights, and sold its Palm Beach tailored clothing line. In September 1993, it sold its Evan Picone women’s sportswear business and trade marks to Jones Apparel Group.
Crystal Brands’ management also went through a shuffle, including the resignation of Richard F. Kral in 1992 and a long search for a new chief executive officer.
Charles Campbell, who was president and chief executive officer at Munsingwear Inc. with a proven record as a turnaround specialist, became chairman and chief executive officer in August. Campbell was at the helm of Munsingwear as it successfully made its way through bankruptcy proceedings.
Crystal Brands currently produces costume jewelry under the Monet, Trifari and Marvella brands. It also produces sportswear under Gant, Salty Dog, Izod, Izod Club and U.S. Open labels.
In 1992, Crystal Brands lost $75.3 million after charges of $45.8 million on sales of $589 million. In the nine months ended Oct. 3, 1993, the company lost $135.7 million after special charges of $82 million from the loss on the sale of Evan Picone.