Knudsen’s Parent Shakes Up Its Board, Names New CEO
Winn Enterprises, owner of financially troubled Knudsen, announced a shake-up Monday of its board of trustees--including the resignation of Ted D. Nelson, a major shareholder and Winn’s chairman until two weeks ago.
The Los Angeles company also named a new president and chief executive for both Winn and Knudsen, the largest dairy in the West. A Winn spokesman said only that Nelson resigned along with trustee Philip Scaturro over unspecified “philosophical differences.” Neither could be reached for comment on Monday.
Nelson, along with his stepbrothers Lee and Dee Bangerter, are the largest shareholders of Winn, a publicly traded investment trust. The Bangerters remain as trustees, however. Trustee Daniel C. Montano, president of a Tustin investment banking firm, was named chairman.
Winn also reported that four new trustees were named to its board: G. Kent Hendrickson, president of Tri-State Office Supply in St. George, Utah; Stanley B. Parrish, of McLean, Va., a consultant and former aide to Sen. Orrin Hatch (R-Utah); W. Douglas Steimle, president of California Pools & Spas in El Monte, and Don W. Wortley, president of IHC Rehabilitation Services in Salt Lake City.
At the same time, Winn said John P. Brincko, head of a crisis management firm and consultant to Winn and Knudsen, was elected president and chief executive of both companies, succeeding Roger M. Kirkpatrick, who resigned in July along with five other top executives. Montano, Nelson and Dee Bangerter had functioned jointly as chief executive of Winn since then. Kenneth Glass, a professional crisis manager, had been serving as Knudsen’s interim chief executive and president.
A Winn spokesman said the company also met Monday with its banker, Citicorp Industrial Credit Bank. Under a loan agreement reached in July, Citicorp has been lending Knudsen Foods, Winn’s chief operating subsidiary, up to $20 million a week to enable it to continue operation.
Winn had borrowed heavily to buy Knudsen in 1983 and again to acquire Knudsen archrival Foremost Dairies of San Francisco in June, 1985. That gave Knudsen statewide reach for its products and milk plants in nine states. Nelson said at the time that the goal was to create a nationwide dairy operation. Some experts have described that as impractical, given the perishable nature of the products.
In any case, by last September, Winn was in debt to the tune of $266.2 million, after having reported a profit for its Knudsen unit of $5 million. Then, last July, it failed to make an $18-million milk payment to dairy farmers, and three suppliers initiated court action that could force Knudsen into involuntary bankruptcy over the $5 million that they claim is owed to them. Subsequently, the company negotiated the continuing loan to keep Knudsen functioning.
Winn has been attempting to sell all or part of Knudsen to reduce its debt.
Monday’s meeting with Citicorp had been scheduled before the shake-up was announced, according to Martin S. Zohn, a lawyer representing Knudsen creditors. Zohn had no other comment except that he expects “further changes.”
