Reisman Files For Bankruptcy

Posted: November 22, 1995

Loyal buyers of Reisman pretzels need not worry: Although J. Reisman & Sons Inc., of Pennsauken, has filed for Chapter 11 bankruptcy, its pips, twists, rings, rods and minis won't disappear from store shelves.

The family-owned company, which has been making pretzels for more than 75 years, received approval yesterday from U.S. Bankruptcy Judge Gloria M. Burns in Camden to use future receivables to keep the company rolling.

"From what I understand, it's business as usual," said Arthur J. Abramowitz, a Cherry Hill lawyer who is representing the company in the bankruptcy proceedings.

In its filing this month, the company listed assets of $7 million - more than double its $3.4 million in liabilities.

"It's unusual," Abramowitz acknowledged. "While they have plenty of equity, they have a shortage of cash."

Because Reisman & Sons is privately held, it does not release sales and income figures.

A number of factors have contributed to the cash crunch, Abramowitz said. Reisman pays its distributors on a 30-day cycle, but stores that buy Reisman pretzels pay the company on a 60- or 90-day cycle, he said. Also, the company has paid out substantial legal fees for lawsuits related to distributorship agreements.

"It's a culmination of a lot of different factors," Abramowitz said.

CoreStates-New Jersey National Bank, with secured claims of $1.6 million, could have opposed the company's use of receivables to keep operating, but did not.

Three descendants of founder Jacob Reisman, an immigrant from Kiev who began his business in South Philadelphia, run the company. During the reorganization, they will explore financing and joint-venture options, without the pressure of daily dunning by creditors.

"I think they're probably more energized now," Abramowitz said. "They have a lot of options."

"It's a different market from when they were one of the largest pretzel makers," the lawyer said. "It's no longer the market their parents knew."

|
|
|
|
|