L.A. Wire Maker Seeking Protection From Creditors

Davis Walker Corp., the nation’s largest independent maker of wire and wire products, said Friday that it filed for protection from its creditors while it reorganizes under Chapter 11 of the bankruptcy code.

The 62-year-old Los Angeles steel processor said it was a victim of import restrictions that forced it to buy costly domestic steel from mills in the East and South.

The company, which makes barbed wire, chain link fencing, stucco netting and other wire products, had sales of about $175 million last year. It employs 850, including about 400 at plants in Los Angeles and Irwindale.

In its bankruptcy petition, Davis Walker listed assets of $97.86 million and liabilities of $94.8 million.

The company said it sought bankruptcy protection after it was unable to pay $42 million to its lenders. That debt includes $14.5 million owed to Bank of America.

Davis Walker said its financial problems started four years ago when the Reagan Administration imposed “voluntary restraints” on the amount of steel imported by American firms to protect domestic steel producers.

Larry Valenti, a Davis Walker vice president, said the restraints forced the company to buy 60% of its steel from domestic producers. Before the restraints went into effect, he said, Davis Walker relied mostly on cheaper imported steel to make its steel wire.

Valenti said the company was unable to compete with imports by Canadian steel processors, which were unaffected by the voluntary restraints.

The company’s financial problems forced it to close its plants in Dallas, Houston, New Orleans and Memphis two years ago. The company continues to operate plants in Hayward in Northern California and in Kent, Wash. It also has plants in Vancouver and Edmonton, Canada. Valenti said the Canadian operations weren’t part of the bankruptcy filing.

In its bankruptcy petition, Davis Walker said it owed $23.4 million to Mitsui & Co. USA Inc., making the Japanese firm its largest creditor. Valenti said Davis Walker bought about 15% of its steel from Mitsui.