Simplicity/SFCA Out Of Business, Into Trouble

2007-8 Simplicity Cribs and Co-sleepers of Death
A bit of background: In 2007, the CPSC recalled a million Simplicity cribs sold over the course of almost ten years after finally being prodded into action by the Chicago Tribune's investigation of crib design-related deaths.

Then again last summer, the CPSC took the extraordinary measure of ordering several hundred thousand Simplicity convertible bassinet/co-sleepers off the market and issuing its own warning after two reports of strangulation deaths. The CPSC was compelled to take this unusual step because Simplicity, now operating under a new corporate shell, SFCA, Inc., had refused to cooperate with the recall, claiming the "new" company had no responsibility for products the "old" company had sold.

Surely, you don't mean that SFCA, Inc. is Simplicity For Children
Don't call me Shirley, and that's exactly what I mean. Last September, Daddy Types reported on the details of SFCA, Inc., which was created in the spring by Blackstreet Capital Management, a Bethesda, MD-based vulture fund, to buy the assets and preserve the management team and operations of Simplicity as an ongoing concern. The sale was facilitated by Simplicity's bankers, who had secured the company's line of credit with claims on its inventory, trademarks, design patents, and other company assets.

By executing an asset purchase instead of buying the entire company, Blackstreet was presumably trying to expunge the problems and liabilities associated with the million-crib recall. [For a detailed and well-informed speculation on Blackstreet's Simplicity/SFCA purchase, check the Bankruptcy Litigation Blog.]

But even as Blackstreet's Simplicity claimed to be an entirely new, unrelated company, it was being run by exactly the same people, and it was--at least for a time, according to a CPSC spokesman I talked with last Friday--still cooperating with the CPSC to provide repair kits to customers who bought the million recalled cribs. Despite public denials by SFCA's lawyer, the Chicago Tribune found that the new company was also still selling products affected by the recall. [That lawyer, Rick Locker, is also general counsel to JPMA, the industry lobbying group whose safety certification was on the hundreds of thousands of deadly Simplicity products sold over the course of nine years.]

In the CPSC's playard recall notices from January and April 2009, Simplicity, Inc. and SFCA, Inc. are considered one and the same. Which makes sense since the defective in question were sold continuously from 2005 through January 2009, or to paraphrase Donald Rumsfeld, SFCA went to market with the products they had.

And though there had to be hundreds of incident reports already on file, they did nothing. Here's how the CPSC put it in the January recall notice:

Manufacturer: Simplicity, Inc. and SFCA, Inc., of Reading, Pa. (These firms appear to no longer conduct day to day operations.)

(Note: Simplicity Inc. and SFCA Inc. have not responded to CPSC's request to recall these products nor have they been responsive to consumer complaints recently received.)

...

Incidents/Injuries: Due to Simplicity Inc. and SFCA Inc. being unresponsive to consumers via their Hotline and Web site, a significant number of complaints were recently reported.

Juliette Reashor, senior manager for public relations at Fisher-Price, said SFCA has been unresponsive and said neither SFCA nor Simplicity is a partner with the firm any longer.

From Blackstreet To Black Site
I also noticed that every mention of Simplicity/SFCA, including several press releases I had linked to, had been completely scrubbed from Blackstreet's website. My call to Blackstreet about the missing company was referred to a new spokesman, Don Meyer, who has not returned calls to comment. Before founding his own public relations firm last year, Meyer worked in the office of the Secretary of Defense, "formulating public affairs strategies" for September 11th, Afghanistan, and the Iraq war. Though the timeline fits, his bio doesn't mention Abu Ghraib, but the "few bad apples" line could sure come in handy right about now.

Maybe the reason SFCA has hired Donald Rumsfeld's publicist--and the reason he's not returning calls--is because this is not [just] a matter for the CSPC anymore. When I asked the CPSC's deputy director of communications Scott Wolfson about the "appear to no longer conduct day-to-day operations" designation and SFCA's involvement in Simplicity recalls, he carefully acknowledged the agency had devised that language and updated all its Simplicity recall notices accordingly. He also strongly expressed the CPSC's imperative to pull the hundreds of thousands of recalled Simplicity products still in use. Apparently, the response rate for both the 2007 crib recall and the 2008 bassinet recall in particular were disconcertingly low.

For any other SFCA questions, though, I would need to contact the public affairs office at the Department of Justice Civil Division. When I finally reached the right crib guy at the Justice Department Tuesday afternoon, he confirmed that he couldn't tell me anything about it.

The last public comment I could find from Blackstreet about Simplicity/SFCA is from an October 2008 profile in the Washington Post. When asked about the recalls and his company's products which resulted in infant deaths, fund founder Murry Gunty only repeated, "It's a very tough situation, and we want to do the right thing."

Now it appears the Justice Department might give Blackstreet their chance.

A Test of Blackstreet's Strategy [washpost]
Toys made by Reading company recalled [readingeagle.com]

Previously, Aug 2008: After Two Strangulations And Corporate Shrugging, CPSC Orders Retailers Pull Simplicity Co-Sleepers Off Market
Sept. 2008: Heckuva Job, SFCA! Simplicity Bassinets Of Death Still On Sale--From The "New" Simplicity