Mark Industries Files for Bankruptcy : Chapter 11: The Brea manufacturer of construction machinery, hurt by the recession and industry downturn, cites debts of $27.6 million.
Mark Industries, a Brea manufacturer of heavy construction machinery, has filed for bankruptcy protection from its creditors.
The bankruptcy court filing shows that the company has $27.6 million in debts, of which $18.9 million are secured, and $29.6 million in assets. Barclays Business Credit Inc., a Sherman Oaks affiliate of Barclays Bank in London, and Bonnet Resources, a mortgage company in San Antonio, Tex., are listed as its largest creditors with a total of $16 million in secured debts.
The recession and a downturn in the commercial and industrial construction industries in the United States, Western Europe and East Asia have combined to substantially reduce the company’s business, said Dale D. Hebert, Mark Industries’ senior vice president. Last year, overseas sales accounted for 14% of total company revenues, and because the domestic market shrank this year, exports have accounted for 25% of this year’s sales, Hebert said.
By filing for Chapter 11 on Monday, the company seeks relief from creditors while it attempts to reorganize by either selling a portion of its business and bringing in a new management or by recapitalizing and keeping the current managers, he said.
“This will enable them to sell some of the assets of the company in an orderly manner,” said Richard J. Moneymaker, a Los Angeles attorney representing the company in its bankruptcy filing. “There are several potential (foreign and domestic) buyers who have made inquiries about purchasing the assets of the company and the company itself in the last six months.”
Mark Industries employs 70 people, all in Brea. This is down from a high of 650 employees in August, 1990, when the conflict in the Persian Gulf began and the U.S. economy dipped into a recession. The construction industry, in particular, suffered a heavy beating, and orders for the company’s equipment dried up. Since January, the company has laid off 340 employees. Hebert said there are no plans to lay off additional workers.
The company, which listed 473 creditors in its filing, is wholly owned by its president, Rallie P. Rallis. The company lists four subsidiaries: Powered Mobile Platforms Corp., a Brea-based manufacturer of aerial lift equipment used in the construction and building maintenance industries; Mark Industries International Inc., a marketing firm in the Virgin Islands; Mark Commercial Finance Corp., an inactive company in Brea, and MI (Australia) Pty. Ltd., a distribution and service firm in Sydney, which is closing.
