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Marquardt Spinoff Files for Chapter 11 Protection

April 06, 1993

Marquardt Manufacturing Inc., a Van Nuys producer of bombs and related munitions equipment, has filed for protection under federal bankruptcy laws because of a dispute with its former parent, Marquardt Co.

MMI filed under Chapter 11 in U.S. Bankruptcy Court in Los Angeles last month to avoid the potential seizure and sale of certain assets by Marquardt, said MMI Chairman Lenn Kristal. Under Chapter 11, a company keeps operating but is shielded from creditors' claims and other outside actions while it reorganizes under the supervision of a bankruptcy judge.

Marquardt's alleged effort to sell the MMI assets is the latest chapter in a legal dispute that goes back to July, when MMI sued Marquardt in Superior Court in Van Nuys. The suit, among other things, alleged that Marquardt retained "several million dollars" in government-contract checks that belonged to MMI and withheld equipment that Marquardt had agreed to deliver to MMI, Kristal said.

Marquardt executives and its lawyers could not be reached for comment.

MMI currently has about 100 workers and about $5 million each in assets and debts, Kristal said. The company was spun off from Marquardt in October, 1991, in a transaction valued at $5.3 million.

Another Marquardt division that makes rocket-propulsion systems was then sold to Kaiser Aerospace & Electronics Corp. and is now called Kaiser Marquardt, also based in Van Nuys. The remaining Marquardt Co., now largely a holding company, is owned by Ferranti International PLC of Britain.

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