By Justin Fenton
Enquirer staff writer
Sight Resource Corp., a Cincinnati-based operator of eye care stores, has filed for Chapter 11 bankruptcy and disclosed it is the subject of a Securities and Exchange Commission probe.
The company, which operates E.B. Brown Opticians and Hearing Centers in Ohio as well as five other regional chains in the Midwest and New England, made the filing Thursday in U.S. Bankruptcy Court and also announced it had shut down all but 32 of its 115 stores.
SRC, which once employed 800 nationwide, now has 180 employees, including 20 at its Madeira headquarters, said the company's counsel, Louis F. Solimine.
By filing for bankruptcy, the company will be able to shed its unprofitable businesses, Solimine said.
"They have a profitable core of stores, and they had a lot of unprofitable stores that were dragging the rest of the companies down," Solimine said. "The bankruptcy process allows them to go forward based on the profitable chains."
The company is facing an SEC inquiry that centers on failure to file periodic financial reports and problems with its internal controls. SRC has not filed financial statements since Dec. 28, 2002.
At the time of its last filing, SRC reported annual sales of $58.9 million and losses of $5.5 million. In bankruptcy documents filed Thursday, SRC's assets were valued at $5.4 million, with a debt of $12.5 million.
SRC also said it would be restating its previously published statements for the first three quarters of 2002 and possibly fiscal year 2001 results.
SRC transferred assets of its Michigan-based Kent Optical Co. subsidiary to CadleRock Joint Venture LP, which helped the company refinance its debt in January. Only three of seven chains - Cambridge Eye Doctors in Massachusetts, Vision World in Rhode Island, and the Eyeglass Emporium in Indiana - are still operating. Judge Jeffrey P. Hopkins authorized the company on Friday to pay utilities and employee wages.
The company's chairman is LensCrafters founder E. Dean Butler. , who also worked for Procter & Gamble in various marketing positions. He did not return a message seeking comment Friday.
Butler was one of a group of investors that purchased the company in 2001, aspiring to turn some of its chains national. In January, Butler and the other investors gave SRC $2.5 million in new equity.
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