Chiquita files for bankruptcy

By Courtney Schlisserman
Bloomberg News Service

Cincinnati — Chiquita Brands International Inc., the largest banana producer, filed for Chapter 11 bankruptcy protection in a plan to reduce its debt by more than $700 million.

The 131-year-old company, which has lost money for the past three years, listed assets of $1.49 billion and debt of $982.3 million in its filing in U.S. Bankruptcy Court in Cincinnati.

Chiquita has struggled in recent years because of a worldwide glut of bananas and a drop in prices, and a long battle over European banana import quotas.

"After a very sad story for many years, 2001 will go down as a year of positive developments for Chiquita," said Chief Executive Steven Warshaw. "We hope to emerge with a good balance sheet and an improved outlook."

Chiquita expects the case to be completed in three to four months and plans to emerge from Chapter 11 in the first quarter next year. Chiquita's largest unsecured creditor is Goldman, Sachs & Co., which represents bondholders owed $121 million, court papers show.

Shares of Chiquita rose 5 cents to 48 cents. They have fallen 69 percent since Jan. 16, when the company said it halted bond payments.

If the plan isn't confirmed by the court, Chiquita may have to file an alternate one or liquidate its assets under Chapter 7 of the Bankruptcy Code, the company said.

Chiquita has blamed European Union trade restrictions for about $200 million in annual lost sales since 1993. The company accumulated about $862 million in debt as its share of the 15-nation EU market fell to 20 percent from 40 percent.

The World Trade Organization ruled in 1997 that the EU restrictions, which gave preference to former European colonies in Africa, the Caribbean and Pacific over those in Latin America, were illegal. The United States and the EU agreed in April to begin rolling back the restrictions until eliminated in 2006.