BACK IN BUSINESS TOY MAKER APPLAUSE BACK FROM BRINK OF FORECLOSURE.

Byline: Gregory J. Wilcox Staff Writer

WOODLAND HILLS - To the delight of nearly 200 employees, the rebuilding of Applause, the venerable plush toy maker that had fallen upon hard financial times, began in earnest Thursday with a standing ovation, a pep talk by the new owner and a catered lunch.

Then it was time to finally get back to work, or at least try.

All the employees - about 450 worldwide - were fired last Friday when the bank foreclosed on the debt-laden business and shut it down.

But inside the headquarters building on Variel Avenue in Woodland Hills, it was as if time had stopped. The offices, workspace decorations and life-size stuffed animals were in the same place Thursday as when the employees left.

Van Nuys resident Caroline Smith, who works in credit and collections, tried to boot up her computer so she could call her clients and tell them all was right in her working world again.

``I want to get this thing up and running so I can see what's going on. I'm sure there will be lots of questions from the other end,'' she said breaking into a smile. ``But we'll be able to take care of it with no problem.''

Sales manager Bret Faber said he thought things would work out.

After all, the company's former chairman and chief executive officer, Woodland Hills resident Robert G. Solomon, had been trying to rescue the company - leaving employees access to regular updates about the negotiations on an answering machine reached via a toll-free number.

``I've been an optimist all along, but the last couple of days I was beginning to have some concerns,'' Faber said. ``Now we are going to get ahold of the customers and let them know that this company is here to stay.''

For Solomon, the new majority stakeholder in the Woodland Hills-based company, it was certainly a case of deja vu.

The one-time partner at industry pioneer Wallace Berrie had bought Applause in 1983 and built it into a major player. Then he saw it through a leveraged takeover later in the decade, eventually engineering a merger with Dakin Inc., a competitor he was running at the time, in 1995.

But it had been 11 years since he'd walked through the work area as an employee himself, and he was not sure what kind of reception he would receive.

And he was surprised to be again at the helm of a company he considers part of his family.

``On New Year's Eve if you had asked me to list 1,000 different places I would end up this year, I don't think Applause would have been on that list,'' he said. ``In so many ways my life and this company have come full circle in the last 12 years. No person or business can function without a compass.''

Solomon, in his speech to employees, ended up getting almost as many rounds of applause as President Bush did during his first address at a joint session of Congress.

``Welcome to the new Applause company, ladies and gentlemen,'' Solomon said shortly after 1 o'clock in the afternoon as former employees packed into the company cafeteria rose in a standing ovation. ``The money was wired about an hour ago, the documents have been signed, and it's our company.''

He talked about the company's heritage - it turns out products for major studios like Walt Disney Co. and Warner Bros. - and reminded employees that Applause has nearly three decades of experience in manufacturing and trading, with vendors and distributors around the world.

``I'm going to make this work, make this company go. I'm not trying to fix anything. It just needs to be refocused,'' noted Solomon, adding that the company no longer was burdened by the debt load, reportedly in excess of $100 million.

Adam M. Michelin, managing director and senior vice president at Santa Monica-based Kibel Green Issa Inc., a turnaround firm, had been acting as Applause's chief operating officer since late last fall, and he said the company is fundamentally sound.

He also said that Solomon knows this business.

``They don't have to do anything. This company right now is successful. There is a great sales force and a great base of 30,000 customers,'' he said. ``From Day One it's a company that's not broken, and (Bob) has that touch. He's created gold wherever he's gone.''

Solomon led a three-entity investment group that bought the old Applause assets. The purchase price was not disclosed, but one of the partners is a unit of Prudential Insurance Co., which has done business with Solomon for nearly two decades.

Terms of the disposition of Applause's debt were not disclosed either.

``All of the creditors took an absolute big-time haircut,'' said one source familiar with the deal.

The new company is called Applause LLC, with Solomon as chairman and CEO.

Locally, about 160 people work in Woodland Hills and another 130 at a warehouse in Carson.

Bruce Ackerman, president of the Economic Alliance of the San Fernando Valley, said the preservation of Applause is good news.

``Applause to Bob Solomon for pulling this off. It's incredible that he was able to pull that back from the brink of foreclosure,'' he said.

Later that afternoon, wearing a yellow hard hat emblazoned with ``Bob the Rebuilder,'' Solomon started to take a visitor on a tour of the company's showroom.

They walked into a hastily arranged meeting of the marketing department, where employees gave Solomon yet another round of applause.

CAPTION(S):

2 photos

Photo: (1 -- color) Former chairman and CEO Robert Solomon enters a room filled with Applause employees Thursday, as they stand to applaud the man who just bought the company and saved their jobs at the toy maker operation based in Woodland Hills.

(2 -- color) Applause employees greet each other warmly upon their return Thursday. The entire staff had been laid off last week.

John McCoy/Staff Photographer