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San Diego-Based Food Irradiation Company to Shut Down, Fire All 77 Employees
The San Diego Union-Tribune
Conor Dougherty
January 13, 2004
Jan. 13--SureBeam Corp., a money-losing maker of food irradiation systems, said yesterday that it will shut down on Friday and terminate its 77 employees.
The San Diego company said it would file for Chapter 7 bankruptcy after failing to reach an agreement with senior secured lender, Titan Corp., from which SureBeam was spun off about three years ago. San Diego-based Titan recently agreed to be acquired by Lockheed Martin.
SureBeam is facing a raft of shareholder lawsuits and an informal investigation by the Securities and Exchange Commission in the wake of an accounting dispute. A trustee will be appointed by the Bankruptcy Court to liquidate the company's business.
"Everyone will be gone by the end of the week," said Terry Bruggeman, a turnaround expert who was appointed SureBeam's chief executive in September.
The announcement, which came in a news release late yesterday, ends a tumultuous several months for SureBeam. The first signs of trouble came in July, when the company announced that it would delay the release of its second-quarter results after the dismissal of KPMG as its auditor.
A month later, the company fired its new auditor, Deloitte & Touche, when the two firms could not come to an agreement over how SureBeam should account for revenue and contracts dating back to 2000.
Bruggeman, who signed a three-year contract with the company, said that the SEC's investigation is ongoing.
SureBeam has since been delisted from the Nasdaq, and its share price has been in a free fall since summer. Shares of the company's stock, which traded in the $2 range before the accounting issues surfaced, closed at 26 cents yesterday.
SureBeam closed down an irradiation center in Los Angeles in August. A month later, SureBeam backed away from its 2003 revenue and earnings forecasts, saying that soft demand for its meat irradiation systems made it tough to predict losses.
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