Huntway Loss Figure Increases Sharply; Manufacturer Plans Debt Restructuring
Stating that its former chief financial officer misstated inventories, accounts payable and other assets, Huntway Partners L.P. dramatically revised its loss for the first nine months of last year, to a $10.9-million loss, compared with $1.9 million it had previously reported.
Huntway said in its annual filing with the Securities and Exchange Commission that it was trying to restructure its debt and if it fails to do so, the company warned it may file for bankruptcy protection.
In the fourth quarter, Huntway said it lost another $3.4 million, so for all of 1992 the Valencia-based producer of liquid asphalt posted a loss of $14.3 million. The company had a profit of $3 million in 1991.
The company said it may dispose of assets at its two refineries in California and one in Arizona.
Huntway previously blamed the accounting errors on its former chief financial officer, Douglas C. Hansen, who was fired in December. The company accused Hansen of writing bad checks and said the SEC and a federal grand jury were investigating Huntway’s finances. Two shareholder lawsuits have also been filed against the company and its officers.
Huntway’s new chief financial officer, Warren Nelson, said last year’s loss was largely because of higher crude oil prices and lower demand for liquid asphalt, which is used mainly for road construction. He said the misstatements were not immediately noticed because “I think basically the former CFO was one of the founders and people just trusted him and felt the numbers were correct.”
Hansen, 44, has not commented publicly on the allegations, and Huntway’s chief executive, Juan Forster, did not return telephone messages left at work and at his Santa Ana home.
Huntway also disclosed in its SEC filing that the state of Arizona was demanding that Huntway’s subsidiary, Sunbelt Refining Co., pay a fine of $2.35 million for alleged violations of environmental regulations. Huntway said Arizona has issued criminal indictments related to record keeping against the company.
Huntway acknowledged in its SEC filing that it has had environmental compliance problems but denied there was any criminal activity.
