The creditors got less than $900,000 on debts of more than $2.3 million.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARPSVILLE, Pa. -- Sharpsville Quality Products' secured creditors have finally agreed on how the proceeds from the sale of the bankrupt company should be divided.
The Sixth Street foundry filed for bankruptcy protection in July 2000 but was eventually forced to sell its holdings.
Hempfield Partners Inc. of Pittsburgh bought the entire operation out of bankruptcy court for $1,055,000 in February and reopened it as SQP Industries two months ago.
After delinquent property taxes and certain administrative claims were paid, the secured creditors -- those who had first-lien positions on such things as land, equipment and inventory -- had less than $900,000 to share among them.
They were owed more than $2.3 million.
They thought they had worked out a plan for splitting the money, but J.J. Ritchie Inc. of Chicago, the single largest creditor, objected to the terms, saying it would be getting only about 10 cents on the dollar.
The creditors have been working on a revised arrangement ever since, said John Holliday, executive director of the Shenango Valley Industrial Development Corp., who helped to negotiate the terms.
The final version, signed into a court order by U.S. Bankruptcy Judge Warren Bentz last Friday, doesn't give Ritchie much more than the original proposal, he said.
If no one objects to the court order, the money will be sent to the creditors June 19, he said.
Buyout group: One of them, A New Beginning, will hand its money over to the employees who were owed back wages when the foundry shut its doors in November.
A New Beginning is a local, community- and church-based organization put together to help employees of Sharpsville Quality Products buy the company out of an earlier bankruptcy seven years ago.