President, CEO and 4 Top Executives Resign at Knudsen

Six top executives at ailing Knudsen Foods--including its chief executive and president--have resigned during the last 10 days, although some remain as consultants.

A spokesman for the Los Angeles dairy products firm declined to explain the changes except to say that the resignations were “individual decisions reached by individual people” and that the company “could not comment on private decisions.”

Meanwhile, the company confirmed that it lost some business from another major supermarket customer Monday when Hughes Markets switched its private-label milk business to another supplier.

A Knudsen spokesman confirmed Monday that Knudsen Chief Executive Roger M. Kirkpatrick and Knudsen President David F. Greenawalt are among those who quit.

No Replacements Named

In addition, Knudsen’s chief financial officer, treasurer, assistant treasurer and central division president have also quit their posts, the spokesman confirmed. None of the executives has been replaced, he said.

In an interview last week, Knudsen’s chairman, Ted D. Nelson, acknowledged that some top executives had left but said he didn’t know exactly why. “There was some legal reason” for the resignations, he said.

Greenawalt was reached at his office at Knudsen. He confirmed that he resigned July 10 but said he has continued to work without compensation or a management contract. He declined to talk about his reasons for leaving.

Kirkpatrick, who resigned several hours after Greenawalt, said in a telephone interview from his home on Monday that he resigned because, after the company lost the confidence of some of its suppliers, he believed that he could no longer be effective. “I kept saying that if everyone--the suppliers, the customers and the employees--just stayed together, Knudsen would have a future,” he said.

After a major Midwestern milk supplier, Mid-American Dairymen, rescinded its credit arrangement with Knudsen about two weeks ago, Knudsen’s lenders and other creditors “got nervous,” Kirkpatrick said.

Kirkpatrick said it was clear to him that he could no longer ask everyone to support the company after some suppliers began to change their commercial relationships with Knudsen.

A company spokesman confirmed that R. Sam Christensen--chief financial officer of both Knudsen and Winn Enterprises, Knudsen’s parent--and Allen Meyer, president of Knudsen’s central division that includes dairy operations in Texas and the Midwest, resigned and have accepted management consulting contracts with the firm.

Two other executives, Brian Thompson, Knudsen treasurer, and Steve O’Shiro, Knudsen assistant treasurer, have resigned their executive posts but remain Knudsen employees.

Knudsen hasn’t paid some of its debt holders since last September. Last Monday it missed $18 million in milk payments to its dairy farmer suppliers. The company also faces an involuntary bankruptcy petition filed against it by International Paper and two other suppliers. The company has 20 days to respond to the action.

Knudsen’s woes deepened Monday as Hughes Markets, a large Knudsen customer, shifted much of its milk business to Certified Grocers, which would market milk under the Hughes label. Hughes would continue to sell Knudsen label milk and dairy products, a Knudsen spokesman said. Last week, Albertson’s, Knudsen’s largest supermarket customer, shifted its private-label business to Jerseymaid.

Also on Monday, the lawyer for one of Knudsen’s largest California milk suppliers, South Valley Milk Producers, said the cooperative planned to ask the bankruptcy court to order the return of about $3 million of milk that the cooperative shipped to Knudsen but hasn’t received payment for. Attorney Michael Hertz said he will ask the court to place a lien against Knudsen’s assets if the milk can’t be returned.