Advertising shop for financial firms buys itself some time, files Chapter 11

The recession and the downturn in financial advertising have picked off another victim. KDJ Advertising, an advertising and marketing agency with offices on Wall Street and in Port Jefferson, L.I., has laid off its staff and filed a petition for protection under Chapter 11 of the bankruptcy code.

The filing, in United States Bankruptcy Court for the Southern District of New York, was made Jan. 14.

“With its core clients coming from the financial community, KDJ saw a swift reduction in revenues as the worldwide economic crisis unfolded,” company President Thomas Score wrote in the filing. “Revenues plummeted 64% between 2007 and 2009.”

KDJ cut expenses and pursued new investment but was finally forced to lay off the remainder of its staff on Jan. 8 and file for bankruptcy protection, Mr. Score continued.

Clients of KDJ include Capital Advisors Group, TeamTrading, ProTrader, CapitalOne Bank and North Fork Bank, according to the company’s Web site.

In an interview, Mr. Score said that a core group of seven staffers have stayed on during the reorganization.

“Everybody believes in what we’re doing and that we are going to be able to come out of this better and stronger,” he said.

He added that he hopes to bring KDJ out of bankruptcy within 90 days with lower costs and a less narrow focus. “We need to reassess that niche that [we’re in] and spread our wings a little more,” he said.

Local media outlets may be sharing in KDJ’s pain. According to the filing’s list of creditors holding the 20 largest unsecured claims, the advertising and marketing firm owes $80,599 to NBC Universal, $52,360 to WABC-AM, and $35,292 to Newsday. The debts are for purchases of advertising inventory.

The New York Islanders hockey team is owed $621,500. KDJ lists its estimated liabilities as between $1 million and $10 million, and its number of creditors as fewer than 50.

[This story first appeared in Crain’s New York Business, a sister publication to InvestmentNews.]