Cuisinarts Seeks Bankruptcy Protection
Cuisinarts Inc., famous for its upscale food processors that surged in popularity in the 1970s, on Wednesday filed for protection from its creditors under federal bankruptcy laws.
Stamford, Conn.-based Cuisinarts said in documents filed in U.S. Bankruptcy Court here that it has liabilities of $43.2 million and assets of $34.5 million, most in inventories in a Connecticut warehouse.
Donald L. Luke, Cuisinarts chairman, president and chief executive, said earlier this week that the company had begun meeting with prospective acquirers, but he would not elaborate. He said the company’s major lender, Bank of Boston, would arrange Cuisinarts’ sale.
“The food-processing business has peaked, and it’s now in a declining stage,” said a Cuisinarts lawyer who asked not to be named. “A food processor is not the type of item that needs to be replaced every year, and the market has been saturated.”
Acquired Last Year
Cuisinarts was founded in 1971 by Carl Sontheimer, an inventor who holds dozens of patents, and his wife, Shirley, of Greenwich, Conn. Two years later, the Sontheimers began marketing the food processors, which quickly became a high-tech prestige kitchen item.
Cuisinarts was acquired last year in a leveraged buyout by a group of investors including Robert M. Fomon, former chairman of E. F. Hutton Group.
The company still controls about 45% of the food processor market, but officials said it has foundered because of a stagnant market and a failure to capitalize on its famous name by using it on other products.
Cuisinarts only recently began branching out to items such as cooking utensils, hand blenders and other cooking products. Only a few small electrical items and some imported cookware bear the Cuisinart name.
Luke also said the company has no control over manufacturing by its suppliers, which are based in Asia and Europe.
Under Chapter 11 of the federal bankruptcy code, a company operates under protection from creditors’ lawsuits while it works out a plan to pay its debts.
As of December, Cuisinarts had about 175 employees.
