Revco Files for Shield From Its Creditors

Revco D. S. Inc., a giant drugstore chain, has filed for bankruptcy protection, a month after missing a $46-million interest payment to bondholders, officials disclosed Thursday.

Boake A. Sells, chairman and chief executive, said the stage was set for the reorganization filing when Revco failed to pay the interest on $400 million in “junk bonds” on June 15. Bondholders were demanding payment of the principal as well as the interest.

Revco issued the bonds to finance its $1.5-billion leveraged buyout in late 1986. When it missed the interest payment, the Revco buyout became the largest ever to fail.

“Revco’s leveraged buyout didn’t work out, and hundreds more have,” Sells said at a news conference in this northeast Ohio city, about 15 miles southeast of Cleveland. “Junk bonds have been the best investment on Wall Street . . . but if you’d only invested in one junk bond you’d be pretty unhappy if it was Revco.”

Sells said D. S. Partners of New York owns controlling interest in Revco.