President of Troubled IRT Corp. Resigns
Troubled IRT Corp., which is struggling to restructure and pay off overdue loans, on Wednesday announced the resignation of president Michael S. Bernath.
At a meeting Wednesday, the IRT board of directors named John W. Battin its new president. Battin resigned in July as president of San Diego-based Wavetek, 10 days before Wavetek announced a $7-million loss for its third quarter ended July 2.
Bernath, who joined IRT in January 1987 after 19 years at Gould Inc., is leaving the company to “pursue other interests,” according to a prepared statement released by IRT. Bernath, 44, did not return phone calls to his Rancho Santa Fe home Wednesday.
Neither IRT Chairman Clifford Brokaw nor Battin was available Wednesday to comment on IRT’s management changes or on the company’s restructuring efforts. IRT manufactures automated inspection systems and nuclear survivability products and services.
In May, IRT initiated a “comprehensive” corporate restructuring at the urging of its lenders after defaulting on two major loans. In August, IRT announced plans to sell three divisions responsible for more than 40% of IRT’s fiscal 1988 revenue.
Last month, IRT completed the sale of one of the divisions, its Vienna, Va.-based national security systems division, to Jaycor of San Diego for $844,000. Still pending is IRT’s sale of two San Diego-based units, its systems survivability products and services division and the special programs division, for $7.4 million to Maxwell Laboratories of San Diego.
IRT also announced plans in August to lay off 30 employees, or nearly 10% of its 340-person payroll.
Annual Meeting Delayed
The company’s annual shareholders meeting, normally held in August, was postponed and will not be rescheduled until “due diligence” is completed on the Maxwell Laboratories deal, O’Brien said. IRT shareholders will be asked to approve the sale at the meeting.
IRT has been in default on the largest of the two loans, a $7.35-million debt to Sanwa Bank California since July 31. Spokeswoman Alison O’Brien said IRT recently received an extension until Oct. 31 of a waiver on the default.
Citicorp, which is IRT’s other major lender, agreed in May to defer overdue interest payments until December on its $5-million unsecured loan. In exchange, Citicorp received a $1.25-million lien on IRT assets.
IRT was also forced to relinquish title to its Torrey Pines headquarters building to mortgage holder Trust Co. of the West after experiencing problems making mortgage payments.
