German model railroad manufacturer Märklin has declared bankruptcy, the company announced Wednesday. The filing comes after the company was unable to persuade a pair of banks to extend a $64 million credit line that expired last Friday.
According to the German business Web site Handelsblatt.com, the filing should allow Märklin to continue operations. "We are determined to restructure our traditional company … using the instruments of German insolvency law and establish it permanently in the market," Märklin executive Dietmar Mundil said in a statement.
Märklin teetered on the edge of bankruptcy three years ago before being purchased in 1996 by the Kingsbridge Capital investment firm. In 2008, the train manufacturer reported sales of $165 million.
Märklin's deal with Landesbank Baden-Wuerttemberg and Kreissparkasse Goeppingen for a 50 million euro ($64.2 million) credit line expired January 30. As a result, the company was unable to pay its workers their January wages.
The company is celebrating its 150th anniversary this year, with special celebrations occurring at Nuremberg's Spielwarenmesse Toy Fair, happening now. Sources say Märklin's upper management has not made an appearance at the show.Read other MR Express stories