Twenty-seven California assemblymen have asked the lead banker of the troubled Knudsen Foods dairy products company for a meeting to discuss "long-term financial solutions" to Knudsen's problems.
In a letter dated Aug. 18, the legislators accused Citicorp of "insensitivity" and seemed to suggest that the bank's actions will influence them on the issue of interstate banking, which Citicorp has lobbied hard to obtain.
At present, out-of-state banks are not permitted to open full-service offices in California. A bill that would permit limited interstate banking has been proposed in the Assembly but will die unless it is approved before adjournment Aug. 29.
Knudsen, the state's largest dairy company, faces an involuntary bankruptcy action and owes Citicorp more than $150 million. Citicorp, whose spokesmen could not be reached for comment late Wednesday, is lending Knudsen $20 million a week to finance its day-to-day operations. The financing agreement expires Aug. 28, according to the letter.