Boyds Wheels Files Bankruptcy Petition
Boyds Wheels Inc. filed a bankruptcy petition to seek protection from creditors while it continues to reorganize its operations and debts. The custom auto-parts maker has $12 million more in equipment and other assets than it has in debts, the bankruptcy petition said, but that cushion is eroding fast because shrinking sales revenue has impeded the company’s ability to meet its debts. Stanton, Calif.-based Boyds is in default, for instance, on a $7.9-million loan from City National Bank, its biggest creditor. “The company overexpanded its manufacturing capability, spent most of its available cash on hard assets [like equipment] and never developed a business sales plan to support all that overhead,” said David Asher, who was brought in as president in June. Boyds went public in 1995 and remained profitable through 1996. Boyds shares closed down 13 cents to $1.75 on Nasdaq.