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Parsons Pine to file Chapter 11 Bankruptcy protection halts auction By DAVID PRESZLER ASHLAND -- Parsons Pine Products president Mike Rasmussen says he will file Chapter 11 bankruptcy today in a last-minute effort to save the company and stop an equipment auction set for Wednesday. Rasmussen said Monday that he plans to pay off all the company's creditors and reopen the mill, although he declined to discuss the specifics of his plan. The mill at Helman and Hersey streets closed at the end of February. Hundreds of pieces of lumber and milling equipment have already been tagged and prepared for the auction, which was to begin Wednesday. The auction preview began Monday and was scheduled to continue today. Heller Financial Leasing foreclosed on the equipment in February after the company failed to make payments on a $658,000 promissory note, court records show. More than $600,000 is owed and the equipment was listed as collateral. The proceeds from the auction were to go toward that debt. Now Heller will have to wade through bankruptcy proceedings to recover the money. "It will delay things," said Scott McCleery, the Eugene attorney representing Heller. "It's a shame. A lot of money has been spent preparing the auction. There's nothing we can do to stop them." The court order that allowed Parsons' equipment to be seized Feb. 2 also requires the company to pay fees stemming from collection of the debt. Rasmussen said he tried to negotiate a settlement with Heller last week but was unable to reach an agreement, leaving him with little choice but to file bankruptcy. The sudden move to stop the auction came as a surprise to Liksa and Associates -- the Grants Pass company hired to run the selloff. Reached Monday evening, owner Wayne Liksa hadn't heard of Rasmussen's plan. "Everything is tagged and ready to go," he said, noting that Heller officials were scheduled to fly into the area today. Liksa said people from around the country had called about the auction, some of whom planned to attend in person. Parsons Pine, founded more than 50 years ago by Jim Parsons, closed in February, laying off its last 40 employees. "I feel so sad about it," said Parsons, 80, who retired from the day-to-day operations in 1989. "We had so many long-term employees. I started out with a two-man operation in the late '40s and built it up to, at one time, 150-160 employees. It's a very sad situation." Jim Parsons and former president Jerry Sivin sold their interest in the company in 1997. Rasmussen and partner Bruce Engel bought the company for more than $2.9 million, court records show. Rasmussen and Engel later sold it to the Encore Group, a publicly held company based in Portland. Engel is president of the Encore Group and Rasmussen is an employee. When it was purchased in September 1997, the company employed 90 people. It made mousetrap blanks, wine racks, knife holders and other secondary wood products and had annual sales of about $7 million. Heller filed suit against Parsons Industries (the corporate parent of Parsons Pine Products), Rasmussen and Engel in January, claiming the company had defaulted on the $658,000 promissory note. Rasmussen and Engel signed personal guarantees on the note. The suit contends the company hasn't made its $15,747 monthly payments since September. It seeks $550,489.49 at 11.75 percent interest per year, starting from Aug. 4. It also seeks $8,300 in late penalties and legal fees. McCleery said no further payments have been made since the suit was filed, pushing the amount owed to more than $600,000. Heller isn't the only company that Parsons Industries owes; at least one other claim has been filed in Jackson County court. Wood Products Enterprises Inc. -- owned by the Parsons family and Sivin -- is seeking $22,005.32 in a suit filed Jan. 25 that claims Parsons Industries hasn't finished paying for the business itself as agreed to in 1997. Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA