Plastic toy maker Ralphco Inc. has filed for Chapter 11 bankruptcy protection after defaulting on four bank loans worth about $4 million.
The molding company filed the motion Oct. 21 in U.S Bankruptcy Court in Worcester, Mass., and has applied to use cash collateral to keep the business going forward while the case is being resolved, according to the filings.
The company owes more than $1 million to unsecured creditors, but said in a filing that there will be no funds available to pay them.
The Worcester-based company blow and injection molds toys and games, plastic banks, candy jars and juvenile-sports products. Founded in 1988 by former art teacher Nancy Dworman, the company had grown to sales of more than $6 million annually at its 165,000-square-foot plant.
The firm also includes a subsidiary, Worcester-based Middlesex Paper Tube and Core Inc., which makes cardboard tubes and plastic end caps.
Nancy Dworman was named the 1995 Massachusetts Small Business Person of the Year by the U.S. Small Business Administration.
The company is named for Dworman's husband, Ralph, who now serves as president.
Calls placed Oct. 24 to several Ralphco officials and a lawyer handling the case were not returned before deadline. A creditor's committee is expected to meet Dec. 2.
Ralphco has 46 employees in Worcester. An appraisal made in December 2002 estimated that the company's molding equipment was worth $1.26 million in liquidation value, and that it could be auctioned off for $758,000, according to court documents.
No auction date has been set, and no potential buyers have stepped forward, according to those documents.