Marquardt Manufacturing Inc., a Van Nuys weapons maker, will be liquidated by a court-appointed trustee, following a bankruptcy judge's finding that the company had little chance of restoring itself to profitability.
MMI had been involved in a messy dispute in Van Nuys Superior Court with its former parent and creditor, Marquardt Co., over certain assets. The assets included MMI's potentially lucrative tank-bomb business.
In March, MMI filed under Chapter 11 of federal bankruptcy laws to block an attempt by Marquardt Co. to sell substantially all of MMI's assets, according to court documents. Under Chapter 11, a company is protected from creditors while it attempts to reorganize.
Earlier this month, MMI asked the Federal Bankruptcy Court in Los Angeles to let the company out of Chapter 11. MMI contended that it was financially healthy and had only filed bankruptcy as a legal maneuver to prevent the potential asset sale.
But Judge Vincent P. Zurzolo rejected MMI's arguments. In a hearing May 5, he converted the company to a Chapter 7 bankruptcy, saying that liquidating MMI would be in the best interests of its creditors.
In court documents, MMI estimated both its assets and liabilities at less than $10 million. The company had about 40 employees.