Glass Group Inc. plans to continue operating its Flat River Glass plant in Park Hills, Missouri until the end of the week commencing 12 September 2005 in the hope that an offer to buy the plant will m…
Glass Group Inc. plans to continue operating its Flat River Glass plant in Park Hills, Missouri until the end of the week commencing 12 September 2005 in the hope that an offer to buy the plant will materialize before then. Should an offer fail to appear, Glass Group will shut down operations and start liquidating the plant“s assets. In the meantime, managers at the plant as well as the United Steelworkers of America, which represents the plant“s hourly paid employees, are working to make sure that does not happen. Activity is focused on removing obstacles faced by Stlzle-Oberglas, an Austrian glass producer that has expressed interest in the plant. The union will soon begin labor-contract negotiations, while managers are working to expedite the due diligence that Stlzle must carry out before it can make an offer. Glass Group“s plan for a one-week deadline to sell the Flat River Glassworks depends on continued financing by key lender, CapitalSource Finance LLC. If that financing is cancelled, Glass Group will be forced to halt its operations immediately. The bankrupt company owes more than USD 38 million to the lender. Although the loan was due on 9 September 2005, CapitalSource agreed to extend it until 12 September while the Bankruptcy Court in Wilmington, Delaware, considers the case. Glass Group and CapitalSource had hoped the court would approve the sale of certain assets to German packaging company Gerresheimer Group GmbH at a hearing on 9 September 2005. It also wanted to temporarily extend the Capital Source loan until it closed the sale, which is expected to occur before the end of September. Gerresheimer Group, which made the only bid in an auction on 8 September 2005, offered to buy Glass Group“s glass factory in Millville, New Jersey, as well as its equity in a joint glass-manufacturing venture in Beijing for USD 20 million cash and the assumption of USD 1.7 million in debt owed to employees. Glass Group must now find buyers for the other assets. At the hearing on 9 September, it became evident that opposition from unsecured creditors dissatisfied with the auction process as well as unions seeking to enforce existing labor contracts would prevent a swift decision. The Steelworkers and the Glass, Molders and Pottery Workers Union, which represents many of the workers in New Jersey, have contracts which would compel the buyer of assets in Glass Group to accept the labor contracts. Gerresheimer does not wish to accept these contracts. The unsecured creditors and the unions asked Judge Peter Walsh on 9 September 2005 to consider appointing a Chapter 11 trustee. A trustee would remove control of Glass Group from the company“s chairman and chief executive, Ken Rock, and other senior managers. At the end of a two and a half hour hearing on 9 September the Judge adjourned until 12 September without a decision. At the hearing, Glass Group“s financial adviser, Robert Smith, said the company was talking to a potential buyer for Flat River Glass, where about 530 people are employed. He did not specify the company, though sources have identified it as Stlzle. The potential buyer told Glass Group it needed about seven to ten days before it could be in a position to make an offer, he said.