Ailing Cardis Says Reorganization Plan Ready : Sale of 16 Units and Tuneup Masters Subsidiary Will Help Pay for Changes

Cardis Corp., the Buena Park-based owner of Tuneup Masters and auto parts stores, said Tuesday that it has completed a reorganization plan that may allow it to emerge from bankruptcy.

A judge will examine the plan March 20 and decide whether to submit it to creditors for a vote. The company’s biggest lenders helped write the plan, and Cardis said it is probable that they will approve it.

The company said it plans to emerge from bankruptcy slimmed down to 29 retail and wholesale outlets and nine warehouses. The auto parts stores operate under the name Marfield’s Auto Supply in Los Angeles and Mr. Parts--among other names--in San Diego.

Cardis said proceeds from the sale of 16 business units and future sales of operations, including the pending sale of its Tuneup Masters Inc. subsidiary, will be used to fund the reorganization plan.

The sale of Tuneup Masters, Cardis’ only profitable unit, awaits approval from the federal bankruptcy judge. Cardis, which filed for bankruptcy in May, has tentatively agreed to sell the auto tuneup chain to Bessemer Securities Corp. in New York for about $60 million.

The sale will net about $13 million, Cardis said. That will be used to repay Tuneup Masters’ biggest lender, West Germany’s Dresdner Bank, which is owed $43.5 million plus interest.

Once sold, Tuneup Masters will work out its own arrangement for repaying the rest, said Charles Knight, Cardis’ general counsel. Tuneup Masters, a Newbury Park-based company founded by race car driver Andy Granatelli, is not in bankruptcy proceedings.

Cardis’ own lender, Security Pacific National Bank in Los Angeles, is owed $79 million. Under the plan, which Cardis filed Friday, the bank will get $15 million in cash, $49 million in notes and about 27.5% of the new stock that Cardis said it will issue when it emerges from bankruptcy.

A group of suppliers owed $14 million will get $5 million in cash and a $9-million note.

Various unsecured creditors--whose debts are not secured by a pledge of Cardis’ collateral--will get common and preferred stock under the plan.

Analysts have said the company took on too much debt and expanded too rapidly in the mid-1980s.