In a double blow to beleaguered L.L. Knickerbocker Co., creditors are trying to force the celebrity-doll marketer into bankruptcy, and Nasdaq has delisted its stock.
Three Taiwan manufacturers filed a petition to force the company into liquidation proceedings under Chapter 7 of the Bankruptcy Code. The creditors said the Lake Forest company owes them nearly $1.3 million.
"The reason we've put this before the Bankruptcy Court is so the company is forced to come up with a plan to pay its creditors," attorney Margaret A. Glynn said. "The business will continue operating for now. Whether or not the business is liquidated depends on the cooperation of Lou Knickerbocker."
The creditors are An Arch Associates Inc., Green Spring Co. and Prime Doll Development.
Chief Executive Louis L. Knickerbocker could not be reached for comment Wednesday. However, company attorney Marc Winthrop said L.L. Knickerbocker will not liquidate. "The company will continue to operate," he said.
Knickerbocker also said Wednesday that it had been notified by Nasdaq officials that its common stock had been delisted Tuesday after the market closed for failing to meet minimum listing requirements of $1 a share.
The shares have traded below $1 since Feb. 8. In the first day of over-the-counter trading Wednesday, the shares slumped to 3 cents, a 52-week low, before closing at 6.5 cents, off 6 cents for the day. Volume totaled 1.5 million shares.
Knickerbocker's stock has had a turbulent past. In 1995, it shot to $52 a share from $4 before a 5-for-1 stock split, a run-up that stirred controversy. Flamboyant broker Rafi M. Khan in July was accused in a lawsuit of manipulating the shares of Knickerbocker in 1995, helping to fuel the sharp gains.
The company has posted losses in 10 of its last 11 quarters.