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Hobbico files for bankruptcy

The company is looking to sell the business

CHAMPAIGN, Ill. (WCIA) -- Hundreds of jobs are in jeopardy after one of the biggest employers in the city filed for bankruptcy.

Hobbico announced its business is failing, so it's being sold. In the past two years their Champaign headquarters has lost about a third of its workforce. As of January 10th it's down to a little more than 300 jobs. 

Champaign County's economic development director says he just reached out to Hobbico this afternoon, offering to help their employees if they do decide to lay people off. 

Hobbico says they're in deep debt but they're trying to keep the company in tact.

"We don't want to lose the people, we don't want to lose the employment capability, we don't want the economy to take that hit." 

That's something Champaign County might have to deal with since Hobbico said their business is failing. 

From cars to planes, it's one of the largest U.S. distributors of radio-controlled and other hobby products. 332 people work at their Champaign headquarters.

"There's a bankruptcy filed and there may be future actions that could result from that, one of those could be a layoff."

Hobbico says they're trying to prevent that from happening. In the past they've restructured the business but that hasn't worked. Now they're putting it up for sale and hoping that will fix the problem. But there are hundreds of jobs at risk here. 

"A company like Hobbico has many all the way from warehouse distribution to high level management jobs, tech jobs, they have marketing jobs, they have business and accounting jobs." 

Lots of jobs that could be lost. But the county's economic development corporation has a way to help if that happens.     

"If they announce layoffs, keep them here and find other companies for them to work for with similar types of jobs." 

The county can't solve Hobbico's bankruptcy problems, but they can help the employees by creating job fairs and setting them up with other opportunities. 

Hobbico said its problems come from a growing competitive market and they've had issues with suppliers. Last week they shut down the office in Reno, Nevada. Asa result, hundreds of employees were let go. 

The company made a statement saying after the closure some of those jobs would be coming to Champaign. But with the bankruptcy announcement, that could be in question. 

They say the Champaign office will stay open through the bankruptcy process. 

We asked a representative from Hobbico how long the company could last without a buyer. But he said they have no comment on that. 

On top of this announcement, Hobbico is under a federal investigation. We first told you two weeks ago that leaders are accused of mismanaging employees' stock. Several current and former workers said their accounts have plummeted. 

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