An attempt to rescue Irving Tanning Co now hangs in the balance with the appearance of a competing offer to close down and sell off the troubled Hartland tannery which emerged recently. Irving have until the end of the week to continue operations as negotiations continue with the company’s mortgagee and creditors, the tannery’s legal counsel Michael A Fagone said on Friday June 10. ‘The situation is very fluid’, according to Fagone. ‘We’re continuing to negotiate with a company that would like to acquire the assets and run the business. We’ve also received an offer from a liquidation company that would sell the assets piecemeal.’
A mid-May proposal from investment company Meriturn Partners LLC, with offices in Raleigh NC and San Francisco, offered $5.75 million in cash plus the assumption of up to $500,000 in employee-related liabilities. Under the terms of the Meriturn deal, top-level management changes were expected, but not reductions in Irving’s operations or 250-person staff, president David P Middleton said in May. However, that offer now appears to be threatened by the emergence of the proposal to liquidate the tannery. Irving’s mortgagee, T D Banknorth and another creditor, Tyson Fresh Meats, are expected to continue negotiating the terms of the Meriturn offer into next week. ‘We were satisfied that today (Friday June 10), we were able to demonstrate to the bank that the Meriturn offer is greater than or equal to liquidation’, Fagone said. ‘Negotiations will continue. We’ve received authorisation from the bank to continue to run the business through the end of next week.’ Fagone declined to elaborate on the terms of the liquidation offer, since negotiations are ongoing, he said.
Two weeks earlier, the tannery signed a letter of intent for their sale to Meriturn. The prospective sale of one of Somerset County’s oldest anchors could have rescued Irving from a plague of financial problems dating from 2001, when Irving first filed for bankruptcy. The town of Hartland and state officials, including Governor John E Baldacci, were drawn into efforts to save Irving when the 69-year-old company filed for Chapter 11 bankruptcy proceedings in mid-March. Middleton had said in mid-May that BankNorth appeared unwilling to further support Irving’s operations, following this latest round of difficulties.
BankNorth did not reply to a request for comments on Friday. Irving owe BankNorth $11.5 million. They have other debts, including $1 million to Tyson Fresh Meats and about $750,000 of bonded debt to the town of Hartland, Fagone said in May. Meriturn describe themselves as an investor and adviser for middle-market restructuring and corporate turnarounds. Pressed by cost competition from Asian manufacturers, much of Irving’s business now lies in supplying leather to shoemakers. Company officials said Irving’s niche in products and colours still give them an edge on overseas competitors. Irving have annual sales of $65 million.
Source: Hidenet.com
