|Published Saturday, November 8, 1997
Minneapolis-based Sled Dogs Co. files for reorganizationSusan Feyder / Star Tribune
Sled Dogs Co., the Minneapolis-based maker and marketer of snow skates and accessories that has pioneered snow skating as a winter sport, has filed for reorganization under Chapter 11 of U.S. bankruptcy laws.
The company's petition, filed Wednesday in U.S. Bankruptcy Court in Minneapolis, listed total assets of about $1.4 million and liabilities of about $3.2 million.
Two units of Norwest Corp. are listed among the company's largest unsecured creditors: Norwest Business Credit Inc., with a claim of $536,000, and Norwest Bank Minnesota, NA, with a claim of $250,000.
Another major creditor is Minson Enterprises Co., a Taiwanese supplier that had sued Sled Dogs seeking payment for $435,000. It listed a claim of $288,655. Earlier this year the two companies had announced a settlement with a schedule under which Sled Dogs could repay Minson.
Chairman and CEO Kent Rodriguez said Friday that he's relieved by the bankruptcy filing because it has enabled the company to obtain debtor-in-possession financing of $150,000 from Norwest Business Credit. The funds will allow the company to implement a direct-sales program that is targeted at its primary market of aggressive in-line skaters, he said.
Sled Dogs previously has sold its skates and accessories through big-box sporting goods retailers such as Galyan's and The Sports Authority, and has advertised its products on television "infomercials."
Rodriguez said the direct-sales program will be significantly less expensive than the infomercials -- the producers of which have $141,468 in claims on the bankruptcy petition -- while more specifically targeting 75,000 prospective buyers.
The additional financing from Norwest Business Credit also will enable the company to fill orders it has been unable to ship until now because of its financial difficulties, Rodriguez said. The company has cut the suggested retail price of its snow skates from $329 to $149 in the hopes it can move more product through its direct-sales and retail channels, he said.
The company has been consistently unprofitable since it was founded in 1991, and it posted a $4.4 million loss last year because of writeoffs on obsolete inventory.
The stock, which traded as high as $5.50 a share in 1994 after the company went public, has been less than $1 a share for the past year. It closed Friday at 5¼ cents a share.
Rodriguez, who replaced CEO John Sundet in March, said the Chapter 11 filing also will enable the company to deal with its unsecured creditors in an orderly manner and seek additional sources of capital. He said the company is exploring a variety of avenues for additional financing, but he declined to elaborate.