Knickerbocker Near Deal With Creditors

Almost four months after three Taiwanese creditors forced L.L. Knickerbocker Co. Inc. into bankruptcy, the celebrity doll marketer said Monday it has converted the proceeding into a voluntary Chapter 11 reorganization.

The Lake Forest company said in a press release that it will file a reorganization plan that, if approved by creditors and the court, would allow Knickerbocker to emerge from bankruptcy “revitalized.”

The plan was developed after three months of negotiations with the creditors’ committee, the company said.

“It’s a good development. The process is moving along,” said Leonard Shulman, the creditors’ attorney. “We don’t have an agreement yet, but we’re getting closer.”

The marketer of porcelain and vinyl dolls and teddy bears was forced into bankruptcy in August by the three Asian manufacturers, who contend the company owes them a total of nearly $1.3 million.

Knickerbocker is expected to ask a U.S. Bankruptcy Court judge today to allow it to use some of its revenue to fund continuing operations and meet payroll. It also wants to set up a plan to pay some key employees retention bonuses to encourage them to stay with the company.