Let us all spend this day of mourning by spraying fuzz onto our bald spots, julienning our potatoes, and spontaneously taking advantage of fishing opportunities.
Ronco, Maker of the Veg-O-Matic, Files for Bankruptcy
By Jeff St.Onge
June 15 (Bloomberg) -- Ronco Corp., maker of the Veg-O-Matic vegetable slicer and the Pocket Fisherman, filed for bankruptcy two years after founder and television pitchman Ron Popeil sold the iconic company for $56 million.
Ronco, which marketed products as perfect for ``grads and dads,'' sought protection from creditors owed more than $32.7 million. It listed $13.9 million in assets yesterday in U.S. Bankruptcy Court in Woodland Hills, California.
``We will seek court approval of a sale process that moves us through within several weeks,'' Chief Executive Officer John Reiland said in a telephone interview. Ronco isn't going out of business and already has a potential, unnamed buyer, he said.
Popeil, 72, started the Chatsworth, California-based company around 1958 and became a household name by hawking products in late-night television ads. He was known for infomercials selling his products and got his start pitching his father's Veg-O-Matic manual food processor with the phrase ``It slices! It dices!''
Ronco was sold by Popeil to a holding company, Fi-Tek VII, in June 2005 for $40 million in cash and a $16 million note, according to court papers. The buyer kept the Ronco name and the right to purchase products Popeil invents before they're offered elsewhere. He continues to work for Ronco as a consultant and spokesman.
Popeil Inventions, owed more than $11.7 million, and other companies owned by Popeil are listed in court papers as Ronco's largest unsecured creditors.
`But Wait, There's More!'
Inventions by Popeil include a machine that scrambles eggs inside the shell, a food dehydrator, an automatic pasta maker and a spray to cover bald spots on people's heads. Among the company's best-selling gadgets is the Pocket Fisherman, a compact rod and reel.
Popeil is listed as an inventor on more than two dozen U.S. patents, according to the U.S. Patent and Trademark Office. His fast-paced TV ads contributed phrases to the lexicon such as ``now how much would you pay?'' and ``but wait, there's more.''
Ronco has moved into infomercials, 30- to 60-minute programs that air repeatedly to sell products. Among the bestsellers is the Showtime Rotisserie, a small oven designed for cooking meat and poultry, using Popeil's latest catch-phrase: ``Set it, and forget it.''
Popeil, through his assistant, declined to comment.
``The brand names will have value'' in the bankruptcy sale, said Bill Brandt of Chicago-based turnaround consulting firm Development Specialists Inc. The problem is ``you need something innovative'' because ``every household has a few of these items sitting in some broom closet.''
Need for Capital
The 2005 buyout of Popeil left Ronco with about $250,000 cash, Reiland said in court papers. The cash ``problem was compounded by the fact that Ronco was entering the period where it required significant working capital in order to acquire inventory for the busy holiday season,'' he said.
According to a court filing, its current assets include inventory of $7.7 million and $3 million in cash and uncollected bills. The company said it generated $45 million of revenue last year.
Reiland declined to say whether Popeil might buy Ronco. The company has arranged bankruptcy financing, and the restructuring is supported by secured lenders, he said. A hearing to approve the new loan and other court requests has been set for June 19.
Ronco shares, which peaked at $2.60 in June 2006, rose 6 cents to 13 cents in over-the-counter Bulletin Board trading.
Ronco's television ads were so familiar to viewers that they were spoofed by comedian Dan Aykroyd in a famous 1976 sketch on the television program ``Saturday Night Live.'' In the sketch, Aykroyd advertises the ``Super Bass-O-Matic '76'' by ``Rovco,'' a blender that turns a whole fish into a brown liquid, which is then drunk by Laraine Newman, who co-starred in the segment.
``Wow, that's terrific bass!'' she says.
The case is In re Ronco Corp., 07-12000, U.S. Bankruptcy Court, Central District of California (Woodland Hills).
To contact the reporter on this story: Jeff St.Onge in Washington, at firstname.lastname@example.org .