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Evatone files for bankruptcy reorganization

A landlord dispute has triggered Clearwater's Evatone Inc. to file for Chapter 11 bankruptcy reorganization.

Executives with the 83-year-old printing and packaging company tried Tuesday to reassure their 200 employees and customers that they plan to keep operating.

"We're going to do everything in our power to make this seamless for them,'' Holland & Knight attorney Rod Anderson said on behalf of the company.

In a filing in U.S. Bankruptcy Court in Tampa late Monday, the privately-held firm did not list total assets or debts but indicated its top 20 unsecured creditors were owed a combined total of nearly $4-million.

"It kind of hit us by surprise. We were aware they were struggling somewhat but felt they would recover,'' said Tom Grove, branch credit manager at Tampa-based Mac Papers, which topped the list of unsecured creditors.

Mac Papers, which has supplied paper products to Evatone since 1982, is owed about $370,000. Aware that Evatone was having cash flow problems, Mac Papers recently started working on a cash-on-delivery basis, Grove said.

Grove said the company appeared to be moving in the right direction to pare payroll after it endured problems with a changing business structure, a tougher economy and "maybe some mismanagement.''

Anderson declined to discuss circumstances that led to the bankruptcy filing, but said the precipitating factor was a dispute with the Chicago investor group that owns its headquarters at 4801 Ulmerton Road.

Evatone is negotiating with its landlord to take less space and is weighing other cost-cutting moves, Anderson said. Layoffs have not been ruled out. In 2007, Eva-Tone posed $36-million in sales, but Anderson indicated a "retreat'' in sales this year.

Evatone was known for decades as Eva-Tone, but it dropped the hyphen five years ago as part of a high-tech makeover. The company made its mark as a maker of music industry products, perhaps best-known for revolutionizing audio recording with its production of flexible vinyl records. For more than 30 years it partnered with the Library of Congress to deliver "talking books and magazines'' helping the sight-disabled. The company started making CDs and CD-ROMs in the early 1990s and that grew into a large part of its operation.

From its Ulmerton Road plant, the firm's commercial printing operation has churned out everything from sheet music and multicolor books to inserts tucked into CDs. Historically, a large chunk of its sales had been tied to products for the religious music industry.

The case was assigned to Bankruptcy Judge Catherine Peek McEwen.

Company president and CEO Carl Evans could not be reached for comment.

Jeff Harrington can be reached at harrington@sptimes.com or (727) 893-8242.

Evatone files for bankruptcy reorganization 11/04/08 [Last modified: Monday, November 10, 2008 1:08pm]
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