Hobbico bankruptcy statement reveals massive debt

CHAMPAIGN, Ill. (WCIA) -- Hobbico declared bankruptcy on Wednesday and there are documents that show just how much they're in debt. 

The bankruptcy petition shows they owe money to hundreds of companies. The list on the statement only shows the 30 largest debts they have.

That's just the start of Hobbico's problems. This loss comes at a cost to more than just the company alone. 

The bankruptcy petition says it's more than $100,000,000 in debt. Current and former employees are feeling the hard financial hit. 

John may worked at Hobbico for four years. He left the company in 2011.

"I was a product support specialist so I would do phone assistance for people with wither Futaba radios or the cars or planes." 

Futaba is a Japanese radio control company and it's at the top of the list of businesses Hobbico owes money to. But they owe money to more than 200 companies. 

That list is for unsecured creditors, meaning companies that didn't have anything backing the debt. 

Hobbico's business is failing and that's why the company is looking to sell, hoping that will solve the problem. But their financial instability could have devastating affects on current and former employees. 

When we asked May if he was one of those people that bought stock in the company he said, "I did. Anybody that was there, your retirement was matched with the employee ownership program." 

People invest in stock at their own risk. But Hobbico is under federal investigation, accused of mismanaging their employees' stock. 

May used to have about $18,000 in his account with the company. But now that Hobbico declared bankruptcy he's not sure how much it's worth. So he called them to find out. It took them three days to respond.

"This was in November and they told me that I had to wait until January to see if they would reevaluate so they could distribute the money. Now it's January and I can't get ahold of anybody."

His questions have gone unanswered and so have some of ours. Reporter Jennifer Jensen asked Hobbico how long the company could remain open without a buyer. They said they have no comment. 

"It does shock me. I never would've seen that coming at all." 

Another former employee I talked to said his last Hobbico stock evaluation was around $70,000. Now it's at $14,000. That's a loss of about $56,000.

Many other current and former employees have reached out to WCIA with the same story.  Thousands of dollars vanished, without the security of if or when they'll receive any of it. 

Hobbico employs 332 people in Champaign. All of those jobs are at risk if the company doesn't find someone to buy the business. 

If that happens the Champaign County Economic Development Corporation said they will help people find other opportunities. Their goal is to hopefully keep those jobs in Champaign.

 

 


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