Millennium Technology files Chapter 11
WHITE CITY Millennium Technology Services, caught in a credit bind,filed a Chapter 11 reorganization action in U.S. Bankruptcy Court in Eugeneon Monday.
The company reduced its work force from 160 to 120 as part of the reorganization.Millennium contracts with other companies to manufacture products such asbar code readers, moisture detectors and headphones.
Three events led to the Chapter 11 action, which protects the companyfrom creditors, said Richard Brown, who heads Rocky Road Corp., the Austin,Texas, company that bought Millennium last year.
The company's secondary lender, Balmoral Financial of San Francisco,announced plans to go into factoring and pulled $200,000 in credit fromMillennium. Factoring lending on receivables generates a higherinterest rate, explained Jim Kendall, chief operating
officer for Rocky Road.
Meanwhile, an audit disclosed an accumulation of obsolete inventory totaling$500,000. That hurts the company because the inventory secures financingnecessary for working capital, Brown explained.
Finally, the company was recently notified that approval of a $250,000loan from the Oregon Economic Development Department was postponed becausethe staffer handling the application went on vacation, Kendall said.
It all happened in a period of seven or eight days, he said.It was a comedy of errors or a comedy of circumstance; it all cametogether at once.
Brown was especially bitter about the state's position.
They said they'd introduce us to bankers, even help carry someof the financing, he said. Then they disappear on us.
He's optimistic that the company can recover within 120 days.
Our cash flow will carry us through, he said. So farour creditors and our customer base have been very understanding. We'renot dead; we're not overly hurt.
He estimates the company will generate $10.8 million in sales this year.
Wayne and Barbara Tarris founded BLT as Beaver Lec-Tronix in Californiain 1978 and brought it to White City in 1982. In 1993, the company finisheda 20,000-square-foot addition to its plant at 1050 Antelope Road that nearlydoubled its manufacturing area. It employed up to 250 people at times.
Wayne Tarris said the company was profitable 12 of 14 years, but wasforced to sell the company in 1996 after its relationship with Western Banksoured. He's pursuing litigation against Western Bank.
Tarris said the hurdle for Oregon contract manufacturers is to get fromassembling parts to the production of complete units.
That's what gets you into the major leagues, he said. Andyou can't get there without the money it takes.