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Heathkit Declares Bankruptcy, Closes for Good (Again)

07/24/2012

The July 19 edition of The Herald-Palladium -- a newspaper serving the communities of Benton Harbor and St Joseph, Michigan -- is reporting that Heathkit Education Company has declared bankruptcy and has officially closed its doors after defaulting on its lease. According to the paper, Heathkit employed more than 1800 people in its heyday after World War II; when it finally closed, its workforce totaled fewer than six people. This is the second time since 1992 that Heathkit Educational Services has shuttered its doors. In August 2011, Heathkit announced it was returning to the kit building business, and in September, that it would once again be manufacturing Amateur Radio kits.

Heathkit owner Don Desrochers told the newspaper that he has filed for bankruptcy and a bank now owns what’s left of Heathkit; the bank is disposing of some items via online auctions. “The situation was purely one of the economy,” he explained in the article. “Heathkit was primarily dependent upon federal and state funding for schools. Spending in education continued to drop down, and it was economically unfeasible to continue operating. When we got back into the kit business, we were losing the education business faster than we were growing the kit business. It was not sustainable.”

According to the newspaper, Heathkit abandoned its lease around March, and in May, Phil Maki said he received notice that Desrochers had declared bankruptcy and that Heathkit would be closed. Maki is treasurer of Southshore Companies, the company that owns the building that Heathkit had leased a portion of. “It’s a sad thing for the community,” Maki said. “A lot of us grew up using Heathkit products, and it’s sad they ended the way they did.”

In May 2012, the ARRL reported there were rumors of the company’s demise, but nothing was certain. Tom Ferriter, of Technical Education Products in Hampden, Massachusetts, told the ARRL at that time that “Heathkit is telling us [outside sales representatives] that they have temporarily closed, but that they are hopeful that they will be able to reorganize. While they’re not telling us too much, they did say that they were having poor sales for a myriad of reasons and are hopeful that they will be able to refinance the company and negotiate with the bank to refinance some of the debt.”

Desrochers -- who served as Heathkit’s President and Chief Executive Officer from 1995-2000 before purchasing the company in 2005 -- told The Herald-Palladium that closing Heathkit was hard for him: “It was a tough decision, but you can’t operate and lose money. Hopefully the employees will find other employment. They were great, loyal employees for a long time.”   -- Thanks to The Herald-Palladium for the information and to Lee Lull, WR8R, for bringing this to our attention



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