By Muhammed El-Hasan
Staff Writer

Leiner Health Products Inc., the Carson-based maker of vitamins and nutritional supplements, has declared Chapter 11 bankruptcy.

Filed Monday, the bankruptcy will allow the company to dig out of its debt as it restructures and looks for a possible buyer.

“Filing for Chapter 11 allows Leiner and its lenders to initiate a formal process for restructuring the company’s debt obligations and for exploring the sale of the business in a timely manner,” Rob Reynolds, the president and CEO, said in a statement Tuesday. “Although we had taken many steps to address the challenges facing our business, they were not enough to offset the cost of our substantial debt obligations.”

Reynolds added that the company does not expect any disruption in its operations or employee layoffs because of the filing. The company also expects to continue to pay its employees and provide them with benefits including health insurance and 401(k).

It was unclear how many people the firm employed.

Also unclear was how long the company expected to remain in Chapter 11. A spokeswoman declined to comment beyond Reynolds’ statement and an earlier company statement.

The Carson firm also said its management team would remain.

The bankruptcy filing does not include its Canadian subsidiary.

Leiner said it had secured an agreement from lenders to provide $74 million in financing that will help the company maintain operations. The financing is subject to court approval, the company said.

The bankruptcy filing came a year after an FDA inspection of Leiner’s Fort Mill, S.C., plant led to a voluntary recall of its over-the-counter drugs because of manufacturing problems.

“Although we have already taken many steps to address the challenges that arose following our March 2007 decision to voluntarily suspend OTC operations by streamlining our operations and manufacturing footprint, these actions were not enough to offset the cost of our substantial debt obligations,” Reynolds said.

muhammed.el-hasan@dailybreeze.com