Winn Follows Its Knudsen Unit, Files for Chapter 11

Winn Enterprises of Los Angeles followed its troubled Knudsen Foods subsidiary into bankruptcy court Tuesday.

Winn, a business trust controlled by real estate investor Ted D. Nelson and his twin half-brothers Lee and Dee Bangerter, filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code. Chapter 11 allows a company to continue operating while it reorganizes and works out a plan to pay its debts.

Winn, formerly a real estate investment trust, also owns MountainWest Savings & Loan Assn. of Salt Lake City.

In its filing, Winn listed assets of $34 million and debts of $25 million. Those numbers are unconsolidated and do not include the assets and liabilities of Knudsen or MountainWest, a spokesman for Winn said.

Knudsen, which filed for bankruptcy protection Sept. 17, listed assets of $422 million and debts of $601.3 million. MountainWest had assets of nearly $343 million at the end of last year.

Winn sought protection from its creditors because “they’ve only got two sources of income--one is called Knudsen and the other’s called MountainWest,” the spokesman said. Winn cannot touch Knudsen income because of its bankruptcy action, while Utah and federal regulations prohibit Winn from using any of the S&L;’s assets, cash or income, he said.

Winn Enterprises tried to build a nationwide dairy through its acquisition of Knudsen in 1983 and its rival Foremost Dairies last year. But the heavy debt load, complicated by production difficulties and a supermarket strike, became too much for the dairy.

Knudsen accounted for more than 90% of Winn’s revenue.

In the latest of several management changes at Winn, the company’s board of trustees was shaken up in mid-September when Nelson and another trustee resigned over unspecified “philosophical differences.” Four new trustees were named. The Bangerters remained on the board.