Rogersound Labs Can’t Find an Angel, Begins Liquidation
Rogersound Labs, the financially troubled Canoga Park-based consumer electronics retailer, has begun liquidation proceedings and has closed its outlets after failing to find new investors.
U.S. Bankruptcy Judge Kathleen March on Tuesday allowed the company to liquidate its holdings under Chapter 7 of the bankruptcy code. Rogersound had 11 locations--all in Los Angeles and Orange counties.
Rogersound, whose owners became burdened by debt when they bought the local audio and video retail chain, filed for Chapter 11 protection from creditors June 1. The investors, who control a holding company known as RS Labs Holding, bought the firm in 1989 from Howard Rogers. Rogers founded the operation in 1971.
As it prepared to file a reorganization plan under Chapter 11, Rogersound executives searched for investors who could buy part or all of the firm.
Unable to find such an investor, the company decided to abandon its reorganization efforts, said Joseph Eisenberg, the bankruptcy lawyer for Rogersound.
“They were negotiating with several prospective merger partners and potential acquirers,” Eisenberg said. “Those efforts did not come to fruition.”
A bankruptcy trustee will make recommendations to the court on how Rogersound’s assets and debts should be handled. In the Chapter 11 filing, Rogersound estimated its assets at about $27 million and listed liabilities totaling about $26.1 million.
Among the major unsecured creditors--those who provided credit or loans without the guarantee of collateral--are Cypress-based Mitsubishi Electronics, which is owed $490,220, and Proton, a Cypress-based distributor of consumer electronics owed $102,679.
Rogersound had sales of $59 million in the fiscal year ended July 31, 1991, compared to sales of $63 million the previous fiscal year. The chain served the higher end of the consumer electronics market.
