Uniroyal Directors Vote to Sell All of Company’s Assets

The directors of Uniroyal Inc. have voted to sell all of the corporation’s assets and, after paying its debts, distribute the remaining proceeds to shareholders.

“This plan will enable Uniroyal to meet all its obligations,” Joseph P. Flannery, the company’s chairman, said Friday.

Uniroyal, which has about 20,000 employees, was once one of the nation’s leading tire, chemical and footwear companies.

But the company had been gradually dismantled since it was bought by its managers for $770 million in 1985, the Waterbury Republican reported Saturday. The sale tripled Uniroyal’s debt to more than $1 billion and required the company to reduce its outstanding debt by $750 million before December, 1987.

Uniroyal announced in May that it planned to sell Uniroyal Chemical Co. to Avery Co. of New Jersey for $760 million. Uniroyal spokesman Yanis Bibelnieks said that move was made to pay off the company’s debts.

Suit by Retired Employees

But a group of retired employees charged June 19 that the chemical company’s sale was part of a planned dissolution of the entire company, and they sued in federal court to delay the sale. The retired employees said a dismantled company could not afford to maintain medical and life insurance benefits for the white-collar retirees, the Waterbury Republican said.

The chairman of the committee that brought the suit, Robert E. Lowell, said Friday’s vote was “what we’ve been afraid of all along.” Lowell, a retired vice president, said earlier this month that “Uniroyal will be left without any substantial operations and with little or no operating revenue, virtually an assetless shell.”

Bibelnieks said the responsibilities that Uniroyal had toward retirees would shift with any purchase to the buyer of the division where they had worked. For example, he said, retirees of the chemical operation would effectively become retirees of Avery Inc.

Other divisions--such as the tire business--are also on the selling block. Uniroyal reached an agreement with B. F. Goodrich Co. that has each company owning 50% of a joint venture. Bibelnieks said a Uniroyal holding company will continue to own Uniroyal’s half-share of the joint tire venture.

Bibelnieks said most of Uniroyal’s employees would be able to continue work with the new owners of their respective divisions.

Uniroyal last month posted an after-tax loss of $4 million on sales of $485 million during the first quarter of the year.

Uniroyal was taken private by its management and the New York investment firm of Clayton & Dubilier Inc. in a leveraged buyout aimed at thwarting an unwanted takeover by financier Carl C. Icahn.