The steel processor says business has eroded so much that it can't emerge from bankruptcy court.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Cold Metal Products says it has been unable to sell its plants on its own and wants permission to conduct an auction through bankruptcy court.
Judge William Bodoh was to hold a hearing today in U.S. Bankruptcy Court in Youngstown on the Boardman-based company's request to sell all its steel-processing plants.
The company filed the request Friday, saying that its business has eroded to a point where it is unable to continue.
Cold Metal filed for bankruptcy protection in August and has been under pressure since to sell its plants in order to repay lenders.
Former workers at the company's Campbell plant, which was closed in August, are hurriedly trying to put together a deal to buy the plant.
They have used state funds to hire a consultant, who is talking to potential investors and a New Jersey equipment dealer who bought the machinery in the plant.
Also, an attorney representing another group of investors said in court last month that his clients are interested in buying and operating the Campbell plant.
Cold Metal is proposing that bidders can make offers for any of its plants or all of them. The proposal calls for bids to be placed by Feb. 21 and an auction be Feb. 26 if there are multiple bidders.
Cold Metal said it will try to reach a purchase agreement by Feb. 19 with a company that would be the lead bidder. In exchange for its willingness to open its bid to others, the lead bidder would be entitled to a break-up fee of up to 3.5 percent of the transaction's value, under Cold Metal's proposal.
Besides the Campbell plant, other plants to be sold are those in Roseville, Mich.; Ottawa, Ohio; Indianapolis; Montreal; and Hamilton, Ontario.
The Canadian plants are not part of the bankruptcy case, but Cold Metal said its Canadian subsidiary would sell them.
The company said it has tried to sell all of the plants for several months. It hired a real estate broker to handle the sale of the closed plants in Campbell and New Britain, Conn., and retained an investment banking company to try to arrange a sale of the operating plants as ongoing businesses.
Cold Metal also has two administrative offices in Boardman, which employ about 40 people. Those offices are not listed among the assets being sold.
The Campbell plant employed 116 before it closed.
In filing for bankruptcy protection last year, the company said it was hurt by a poor economy, high pension and health insurance costs for retirees and unprofitable plants in Campbell and Indianapolis. The company employs about 350.