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Claims against SRS reach $3.6 million

In the local office of the U.S. Bankruptcy Court, Scientific Radio Systems Inc.’s file bulges.
More than 60 unsecured creditors–including several Rochester firms–have filed claims against the company, which last month petitioned to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
Tech Ventures Inc., a local venture-capital firm, is the largest unsecured creditor for the maker of communications equipment. Five investors under the Tech Ventures umbrella–President Paul Cherin, John Hammond, Paul Horowitz, Alan Martens and Robert Tuite–loaned SRS more than $200,000 over the past two years.
“(SRS’) debt structure is so bad at this point that I don’t think they’ll be able to pull out,” Cherin said.
Yet Tech Ventures’ president is confident the investment is not lost, despite SRS’ woes. SRS managers signed personal guarantees for $60,000 borrowed in November and for another $148,000 borrowed in March 1993.
Those guarantees are backed by other assets in the management’s portfolio, Cherin said, including Ithaca Acquisition Corp.–formerly Ithaca Gun–and Rytown Millwork Inc., an Ontario County firm that makes windows and doors for the construction industry. Cherin does not know whether these assets will first be tapped by any of SRS’ nine secured creditors, however.
Cherin expressed concern that other companies managed by the SRS team–Robert Clement, Thomas Herstine and Paul Gutenberg–also might be on shaky ground.
Gutenberg would not comment on Rytown’s financial status. The privately held firm employs 18 to 22 workers “under normal conditions,” he said. Now only 16 workers are on the job.
Gutenberg attributed the staff reduction to a seasonal downturn in construction during the winter months. He said Rytown continues to be a major supplier for the building industry in Rochester.
Claims from unsecured creditors by midweek totaled $1.1 million. Many of those creditors are Rochester firms.
Rochester Gas and Electric Corp. filed a $40,000 claim for unpaid utilities at the firm’s Orchard Street facility. Burns Personnel Inc. made a $19,405 claim, Masline Electronics Inc. filed for $11,080, and Hartmann International Services Inc. filed for $8,200.
First in line, however, are the company’s nine secured creditors, with claims totaling $2.5 million. The largest chunk–some $2 million–is owed Prime Capital Inc. of West Palm Beach, Fla.
Chase Manhattan Bank N.A. filed a $400,000 claim for a first mortgage.
SRS also took out six auto loans–with Key Bank of New York, Ford Motor Credit Corp. in Cleveland and GMAC Financial Services–at roughly $16,000 a pop.
“That’s not a boondoggle, as far as I know,” Cherin said, noting that the vehicles were used for workers who maintained the firm’s five-year contract with the National Weather Service.


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