Defense Contractor, Focus of Probe on Nofziger, Files for Bankruptcy

Wedtech Corp., a military contractor under investigation for allegedly paying off former Reagan aide Lyn Nofziger for improper lobbying, filed for reorganization Monday under Chapter 11 of the federal bankruptcy law.

The Bronx-based company suspended operations and laid off most of its 1,500 employees last week.

In documents filed with its Chapter 11 petition at U.S. Bankruptcy Court in Manhattan, Wedtech stated that as of June 30 it had total assets of $218.6 million and total liabilities of $151.5 million.

But Wedtech “estimates that its operations for the 30 days following the filing of the Chapter 11 petition will result in a net cash flow deficit of $1.7 million,” according to an affidavit filed by Wedtech President Anthony Guariglia.

Last week, the Navy found Wedtech in default on a $134-million contract to manufacture pontoons and ordered the firm to stop production. About $24 million of that contract had yet to be paid to the firm, according to published reports.

Wedtech’s court papers said that its financial difficulties “are of recent vintage” and blamed “adverse publicity regarding allegations of improprieties in the context of certain transactions entered into in the early 1980s.”

The federal government is investigating blocks of stock the company paid to Nofziger, a former top political aide to President Reagan.