Judge OKs Glasstech plan to exit bankruptcy
6/29/2002Glasstech, Inc., of Perrysburg Township has won approval for a plan to emerge from Chapter 11 just five months after the glass plant equipment supplier sought relief from $9 million a year in interest payments and other debt.
Judge Judith Walrath of U.S. Bankruptcy Court in Wilmington, Del., agreed at a hearing Thursday to approve a plan that will convert bond-owners holding $70 million in Glasstech notes into controlling shareholders.
“Everybody at Glasstech is very excited about the company's future,” said spokesman Mike Hart. The firm, which lost $35 million the past four years, expects to be profitable next year.
It will be the second time the firm has been in and out of bankruptcy in nine years.
When the plan becomes effective after a 10-day waiting period, the firm that styles itself as the world's technology leader in glass-bending and tempering equipment will emerge from bankruptcy.
The firm's 700 creditors approved the plan by an “overwhelming majority,” although Mr. Hart was unable to provide a more specific breakdown of voting. Company officials repeatedly have refused to comment publicly.
A bankruptcy expert said the five months Glasstech spent in Chapter 11 was brief. “It's definitely quicker than average,” said Louis Yoppolo, a bankruptcy lawyer and trustee in Toledo. “Evidently, they knew going in what they were going to provide to creditors and anticipated that it was going to be acceptable.”
Under the plan, creditors will receive a combination of stock, cash, and installment payments. Firms that provided supplies and services - known as trade creditors - are expected to receive close to all that they are owed. Others will receive much less than what they are owed.
The local company will issue 158,463 shares of stock - none of which will be publicly traded - that will go mostly to bond-holders.
At the time of the Chapter 11 filing, the firm listed $37.4 million in assets and $80.6 million in liabilities. Glasstech blamed the bankruptcy on the nation's weakened economy, a slowdown in the auto industry in key markets such as the Asia-Pacific region, and the aftermath of the Sept. 11 terror attacks. Additional factors, according to outside observers, included increased competition, declining market share, expiring patents, and high overhead.
The firm, founded in Toledo in 1971, employs 120 and had fiscal 2002 sales of $35.6 million.