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Irvine, Calif.-Based Vegetarian Food Maker Files for Bankruptcy

Posted on: Friday, 14 October 2005, 21:00 CDT

By Jeff DeMoss, Standard-Examiner, Ogden, Utah

Oct. 15--OGDEN -- Vegetarian foods company Gardenburger Inc., which employs more than 150 at its manufacturing plant in Clearfield, filed for Chapter 11 bankruptcy protection Friday.

The Irvine, Calif.-based company, which brought the veggie burger into the American mainstream in the late 1980s, said in a prepared statement that employees would not be affected by the filing.

The company deferred press inquiries to the statement, in which it said Gardenburger will "continue operating its business in the ordinary course, with no changes to its vendor, customer, and employee relationships, and no disruption in shipments to its customers expected."

It said the company has spent several months preparing for the filing, and has developed a plan to maintain its regular production schedule at the Clearfield facility, its only production plant.

The company's preliminary plans to emerge from bankruptcy within three to four months include elimination of $27 million owed to its primary creditor, Annex Holdings I L.P., although it didn't specify a plan for getting rid of the debt.

It also will cancel all existing preferred and common stock interests and, upon exit from bankruptcy, will convert to a privately owned company.

Gardenburger is currently traded publicly on the NASD (National Association of Securities Dealers) Over-the-Counter Bulletin Board. Its shares, trading under the symbol GBUR.OB, closed Friday down 3 cents at 1.1 cents per share.

The company has been losing money since 2003. For the 12 months ended June 30, it lost $15.7 million on sales of $44.6 million.

Gardenburger opened its 120,000-square-foot food processing plant at the Freeport Center industrial park in February 1998. In October 2003, it closed its headquarters in Portland, Ore. and consolidated those operations in Clearfield.

The company maintains administrative offices and about 10 employees in Irvine, which serves as its official headquarters.

Founded in 1985, Gardenburger started by selling a single veggie burger product. It has since expanded into soy-based, meatless foods and other meat substitutes.

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Source: Standard-Examiner

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