Standard Brands Says It May File for Bankruptcy

Standard Brands Paint Co. on Wednesday warned that it may have to file for bankruptcy protection for the second time in two years and liquidate its assets if it does not receive additional financial support from its largest stockholder, Venezuelan paint manufacturer Corimon.

However, Standard Brands’ Chief Financial Officer Howard Schwarz said the company has no immediate plans to file for bankruptcy protection and is in talks with Corimon and various financial institutions in an attempt to arrange financing.

In a Securities and Exchange Commission filing, the loss-ridden Torrance-based paint retailer said it needs an additional $4 million by year-end to repay lenders and cover its expenses. Corimon spokeswoman Kristin Anderson said the Venezuelan firm has pledged support but did not specify how much money might be involved. Corimon has already given Standard Brands $1 million in cash.

“If CRM [Corimon] is unable to provide or arrange financial support, the company’s ability to continue as a going concern would be uncertain,” Standard Brands said in the filing. It filed for Chapter 11 bankruptcy protection in 1992, emerging from it in 1993.

If it does enter bankruptcy, Standard Brands said in the filing that it is unlikely it would be able to present a plan of reorganization acceptable to its creditors and would most likely go through a liquidation process.

Corimon brought 77% of Standard Brands in May as part of a restructuring effort. But as part of a stock conversion, Corimon now has a 55% stake. Standard Brands operates 50 stores, all in California, down from 135 in 1992.

Standard Brands’ stock price plunged 37.5 cents to close at 62.5 cents on the New York Stock Exchange on Wednesday. Corimon shares on the NYSE fell 12.5 cents to $3.625.

The company on Tuesday announced the resignation of Arthur W. Broslat as chief executive, to be succeeded by Corimon executive Gilbert Minionis.

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Dow Jones News Service contributed to this report.