Blue Banner Working Hard To Get Out Of Bankruptcy

KENT

The lawyer for Blue Banner Foods Inc. says the 44-year-old company will survive Chapter 11 bankruptcy, but its owner is not so sure.

"I don't know that the company will get out of Chapter 11," says Ernie Merlino, whose family owns Blue Banner. "But we're trying."

Blue Banner makes condiments - vinegar, soy sauce, salad dressings and mayonnaise - for such companies as Costco Wholesale, Fred Meyer Inc. and Rax Restaurants. Merlino would not discuss the exact reasons why his company was forced into a voluntary Chapter 11 filing, but part of the problem was a proposed purchase of stock in Blue Banner by another company.

K.R. Lords Inc., a developer and venture-capital group in Mukilteo, offered to purchase Blue Banner stock but failed to come up with the money, says Leland Bull, Blue Banner's attorney.

Meanwhile, Blue Banner continues to operate with 38 employees here. One Seattle creditor, Acme Food Inc., remains bullish on Blue Banner.

"They've been a valued supplier to me for a long time, and I will continue to buy from them," says Don Linde, Acme's owner. "You hate to see small, local companies go under."