Great Western Sugar Files for Chapter 11 Protection
Great Western Sugar Co., one of the last assets of Hunt International Resources Co., filed for protection from its creditors Thursday in federal bankruptcy court.
The Denver-based company had been shut down last week by its parent company, which was once a major holding of billionaire brothers Nelson Bunker Hunt and W. Herbert Hunt of Dallas.
Great Western filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code, deputy court clerk Marge Tucker said.
Lenders in Control
For the past two months, the Hunts had sought bids for Great Western, but they were apparently unable to make a sale that satisfied creditors. Hunt International’s lenders have been in control of the ailing company’s finances for several weeks.
The Chapter 11 filing was the latest in a series of financial embarrassments and downturns experienced by the wealthy Hunt family, once one of the nation’s richest clans.
Robert White, Hunt International’s chief counsel, was not available for comment, said a secretary who asked not to be named. No one else could comment for the company, she said.
Hunt International is one of the brothers’ three major holdings. The brothers invested heavily in energy, in commodities such as sugar and silver, and in farmland, all of which have experienced slumps. Losses for the family have been estimated at $4 billion.
An association representing 2,000 Great Western sugar beet growers had tried to purchase the company and its Northern Ohio Sugar Co. subsidiary during the two-month bidding process.
The association, Greeley, Colo.-based SUGRO, said it hoped to resume operation of the company’s now-idle refineries.
Hunt International disclosed in an earlier Securities and Exchange Commission filing that it was in default on a $124.5-million line of credit at the end of January and had borrowed an additional $92 million. The assets of the company were valued at about $192 million as of Sept. 30, 1984, according to the SEC filing.
The sugar industry has been hurt by the popularity of artificial sweeteners. Growers said that, because of the high cost of shipping, they would have to switch to other crops if Great Western permanently closed.
Paychecks Bouncing
Last Friday, 250 to 300 remaining Great Western employees were laid off, and operations at its 13 refineries ceased. One week earlier, paychecks to employees bounced when banks stopped funding some of the company’s operations.
Troubles for the two Hunt brothers have not been limited to their financial affairs. Last week in Washington, the Commodity Futures Trading Commission accused the two, along with several other individuals and companies, of illegally manipulating the silver market during late 1979 and early 1980.
The brothers have denied any wrongdoing.
The complaint said that the Hunts and others acquired more than 100 million ounces of silver bullion during a period of a little more than six months, driving the price artificially high. When prices started to fall, the complaint alleged, the defendants took a number of steps to halt the decline.
