Catalogers Expect Fulcrum Titles to Go Elsewhere
The company announced July 30 that it had ceased operations and filed for protection from creditors under Chapter 11 of the federal bankruptcy code. Fulcrum further said that it had no immediate plans to reopen and that it was negotiating with several buyers who are interested in its brands After the Stork, Storybook Heirlooms, Playclothes and Zoë.
"As long as the price is reasonable, they should have no problem selling those catalogs," said Maxwell Sroge, president of Maxwell Sroge Co., catalog consultants in Evanston, IL. "The kids market is a very strong market right now. Just about every major cataloger has started a kids book -- there's L.L. Bean kids, Lands' End kids, Lillian's kids."
The bankruptcy, which was filed in Delaware, will be heard by Judge Peter J. Walsh. Laura Davis Jones of Young Conaway Stargatt & Taylor, Wilmington, DE, was listed as the attorney on the case. Richard A. Sebastiao, president of RAS Management Advisors Inc., has been named chief restructuring officer. Also included in the bankruptcy are its subsidiaries, Fulcrum West LLC and Equipment Bond Purchaser Inc.
In paperwork filed with the court, the company estimated that it owes between $50 million and $100 million to more than 1,000 creditors, including Concept Apparel, Allentown, PA; McCann-Erickson, Tokyo; and Sanderson Temps, Albuquerque. Fulcrum had 565 employees, according to 1996 figures from Hoover's Company Information.
Signs of problems at the company appeared two weeks before the bankruptcy filing when, amid swirling rumors, an executive assistant confirmed that company CEO Michael G. Lederer and president and COO Scott A. Budoff were "no longer in an operating function" at the company.
The cataloger had filed a registration statement with the Securities and Exchange Commission in March 1997 to initiate an initial public offering, but the IPO never occurred.
At the company's customer service number for Storybook Heirlooms, a message mentions the bankruptcy filing and says the company is no longer accepting orders or shipping goods. The message further states, "We hope to reactivate the company through a sales transaction."