Huntington Beach Hazardous-Waste Hauler to Reorganize Debt

Financially troubled Security Environmental Systems Inc. said Friday that it has filed for bankruptcy protection while it reorganizes its debts.

The hazardous-waste hauler also said that it had laid off five employees at its Huntington Beach headquarters on Thursday.

The bankruptcy filing, which halts creditors’ claims while Security Environmental prepares a repayment plan, “gives us a chance to pay off all our creditors,” said Ellen Batzel, the company’s president--and chief executive officer since directors last fall ousted Security Environmental founders Alfred Grossman and his sons Stephen and Jonathan.

Batzel said that the first stages of the company’s reorganization are underway. It has closed all its offices outside California and subcontracted all of its government work to another waste hauler, she said. She declined to identify the subcontractor.

She said that former Security Environmental employees in Florida, Georgia, North Carolina, New Mexico, Missouri, Kansas and Iowa have all been hired by the new subcontractor.

The company’s problems date back at least a year but their origins are shrouded. In February, Security Environmental was delisted by the Nasdaq stock market for failing to file financial reports for its most recent fiscal year, which ended June 30, or for subsequent quarters.

Batzel has said that when the company does prepare the financial documents, it expects to report sizable losses for the 1994 fiscal year and the first half of the company’s fiscal 1995.

For the three months ended March 31, 1994--the most recent quarter for which it did report results--Security Environmental lost $562,827 on revenue of $1.5 million.

In December, the company paid a $325,000 settlement to end a breach-of-contract lawsuit. It now faces a suit in Delaware, where it is incorporated, that could force it to make management changes.

WNH Investments in San Marino, which owns 38% of the company’s stock, sued in January to force the Security Environmental to recognize WNH with representation on the board. Batzel contends that WNH improperly obtained its shares from the Grossman family and should not be allowed to vote them.