Coleco Chief Resigns; Firm Lays Off 475
Arnold C. Greenberg has resigned as chairman and chief executive of Coleco Industries Inc., according to an announcement from the troubled toy maker.
The company’s board named Morton E. Handel to succeed Greenberg as chairman and chief executive and also named Handel a director, the Coleco statement said.
J. Brian Clarke will continue as president and chief operating officer, while Greenberg will remain as a consultant and a director of Coleco, the firm said.
“It is necessary to intensify and accelerate cost-cutting actions already begun and to further contract the size of the company,” Greenberg said in the statement.
He also said “financially directed leadership is desirable during this period, and I believe Morton Handel, working together with . . . Clarke can accomplish these critical objectives.”
Coleco, which once rode high on the success of its Cabbage Patch Kids dolls and other toys, was hit by declining sales in recent years along with other major toy manufacturers.
The toy maker posted losses of $105.4 million in 1987 and $111.2 million in 1986.
On Tuesday, Coleco laid off about 330 employees at manufacturing and distribution facilities, mainly at Coleco’s three manufacturing plants in the Albany, N.Y., area.
The company also laid off about 145 members, or 35%, of its corporate staff.
In a separate announcement on Wednesday, Coleco said it had engaged the Hallwood Group merchant banking firm to assist in restructuring its balance sheet and providing working capital requirements.
Coleco attempted in March to cut its $335-million debt by more than half by exchanging four separate issues of debt securities for a combination of new debt and common stock. The company said that move was the next-to-last step before a possible filing for federal bankruptcy protection from creditors.
But reception to the plan has been cool, and Coleco last week for the second time extended the deadline for holders of debentures to agree to the proposal. The new deadline is May 13.
