Struggling Baldwin Piano & Organ Co., the 140-year-old company whose instruments have been played by artists ranging from composer Aaron Copland to rock musician Bruce Hornsby, Thursday sought bankruptcy court protection from creditors.

        The Deerfield Township-based company, which has grappled with a lack of cash for the last month, was unable to pay its approximately 1,000 employees last week.

Hendricks

        The company, which abandoned manufacturing in Cincinnati years ago,employs about 60 at its corporate offices.

        A hearing on the company's bankruptcy petition is scheduled for this morning in federal bankruptcy court in Cincinnati.

        The decision to seek bankruptcy court protection while attempting to repay creditors comes as:

        • Baldwin has struggled with more than $17 million in losses in the past two years.

        • A stock price that has plunged more than 60 percent in the last year.

        • Growing investor and dealer dissatisfaction with the regime of former chairman and chief executive Karen Hendricks, who retired this year.

BALDWIN'S HISTORY

A look at the almost 140-year history of the Baldwin Piano & Organ Co:     • 1862: Music teacher Dwight H. Baldwin opens a piano store in Cincinnati.     • 1891: After deciding to produce “the best piano that could be built,” the company offers its first vertical piano designed by technician and inventor John Warren Macy and purchases a brick building on Gilbert Avenue as its manufacturing plant and headquarters.     • 1900: A year after D.H. Baldwin dies, a Baldwin grand piano is awarded the Grand Prix at the Paris Exhibition, joining a limited number of manufacturers supplying concert grands to performing artists.     • 1935: In the midst of the Great Depression, Baldwin experiments with electronic musical tones, which led to development of the Baldwin electronic church organ.     • 1942: During World War II, Baldwin plants produce military aircraft parts. Expertise in building wooden aircraft wings is ultimately applied to the company's piano assembly.     • 1952: President Truman plays a Baldwin piano during the first televised tour of the White House.     • 1962: Two American space flights employ electronic encoders developed by Baldwin researchers. The company also opens a 600,000-square-foot plant in Greenwood, Miss., to build piano and organ cabinets. (The company will close that plant this month.)     • 1973: Baldwin builds its 1 millionth vertical piano, and the New York Stock Exchange begins trading the company's stock.     • 1986: Two years after being acquired by senior management and taken private, the company makes a public stock offering and the stock is listed on the Nasdaq market.     • 1994: Karen Hendricks, a former Dial Corp. and Procter & Gamble Co. executive, is named president and CEO.    Source: Baldwin Piano

        Ms. Hendricks, one of Cincinnati's highest profile female executives and a former Procter & Gamble Co. manager, was out of town Thursday and couldn't be reached for comment.

        Kenneth W. Pavia, a California investor who succeeded Ms. Hendricks as chairman three weeks ago, said the liquidity crisis coupled with “the legacy of past management” made the bankruptcy filing unavoidable.

        Without mentioning Ms. Hendricks by name, Mr. Pavia laid much of the blame for the company's current problems on Ms. Hendricks' administration.

        “Disproportionate severance agreements, excessive inventory, excess administrative expenses in relation to historical company performance” were among the issues he said the company couldn't overcome short of bankruptcy court reorganization.

"Bright future'
        “I think this company has a tremendously bright future,” Mr. Pavia said. Baldwin's stock closed Wednesday at $2.15 before trading was suspended Thursday.

        “Our plan is to try and reorganize this company as a publicly traded company,” Mr. Pavia said.

        Robert Jones, a music industry veteran who succeeded Ms. Hendricks as CEO, said that with the support of employees and dealers, “Baldwin can return to profitability within a relatively short time.”

        Bill Dollarhide, a Pensacola, Fla., Baldwin dealer and member of the company's Dealer Advisory Panel, said that “while nobody welcomes bankruptcy, this needed to happen. ... A lot needs to be fixed which has gradually broken over the last several years.”

        Mr. Dollarhide and Mr. Pavia agreed that Baldwin's problems aren't because of any softness in the piano market.

        “The market for pianos is gradually increasing,” Mr. Dollarhide said, as more affluent baby boomers are attracted to the instruments.

        Brian Majeski, editor of Music Trades, an industry publication that tracks piano shipments to dealers, said shipments last year were 105,000, up from 101,000 units in 1999.

        “The piano business hasn't been that bad,” he said.

        Mr. Dollarhide was part of a 1999 revolt among Baldwin's 350 dealers who sought Ms. Hendricks' removal in a letter to Baldwin's board of directors.

        Mr. Dollarhide said he had nothing personal against Ms. Hendricks.

        “I just don't think she understood the music business,” he said.

        Earlier this year, as the company's financial position continued to deteriorate, the dealer panel renewed its call to the board that Ms. Hendricks be removed, he said.

Operations sold
        In the last year, under Ms. Hendricks' management, Baldwin has sold its contract electronics and consumer finance divisions, and its 11-store retail chain and closed its Greenwood, Miss., woodworking plant.

        As a result of those asset sales, the company's debt at the end of March was about $34 million, down from about $40 million at the end of December.

        Last month, after weaker sales, Baldwin said its main lender, GE Capital Corp., had tightened its lending terms. That move aggravated its cash-flow problems.

        Mr. Dollarhide said the quality of pianos from the company's two plants in Arkansas lately “is some of the best we've seen in years.”
       

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