Larger text
Smaller text
Print
E-mail
Gateway Outdoor Advertising files for Chapter 11
Like many other companies, Heard Communications Inc. was hit by last year's sharp decline in advertising. But its bankruptcy was also hastened by its recent purchase of a double-decker bus company in New York City that was shut down after Sept. 11, according to the company's chief executive.
And as the economy soured, Gateway's largest creditor bank asked for accelerated loan payments, he said.
"The only reason we really got into this is because of the bank," said Craig Heard, president and CEO. "We chose bankruptcy as a way of protecting the company."
The company filed for bankruptcy protection in late February in Newark, N.J. Heard, who bought Gateway in 1989, is a New Jersey resident.
The company, which was founded in Pittsburgh 1937, employs about 15 people locally and another 60 at some 18 additional offices in the United States and Canada. No Gateway employees have been laid off during the current economic downturn. But Heard said most accepted pay cuts.
Gateway's sales last year were $24 million. The company has about $15 million in debt, nearly all of it with Imperial Credit Industries Inc. of Torrance, Calif. When Imperial's loans to airlines and airline-related businesses went bad last year, the bank tried to collect from other debtors, he said.
"We could not do that," Heard said. "The loans were not due yet, and we were a performing client."
Imperial Credit reported losses of $67.7 million, or $1.60 per diluted share, in the fourth quarter of 2001, according to a company statement. A spokesman could not be reached for comment.
Two years ago, Gateway bought a company that operates tour buses in New York City and Miami. However, the Sept. 11 terrorist attack in New York left Gateway unable to operate its buses there.
Gateway also rents advertising space on about 4,000 billboards and on 4,000 bus benches throughout the country.
In Pittsburgh, the company has contracts with 16 suburban municipalities to build some 225 bus shelters. Heard, who said the company has notified each of the municipalities, said the company intends to fulfill its obligations in those communities.
More Business headlines
- O'Hara company recalls devices after FDA action
- Pittsburgh Post-Gazette offers managers buyouts
- Pitt's hybrid 'campers' seek Insight from inside
- Borders Group to close 200 Waldenbooks stores
- MTR Gaming has third-quarter profit despite falling revenue
- Education Management reports net income for quarter
- General Nutrition Centers Inc. reports third-quarter profit
- Web gives authors options to publish
