SPRINGFIELD, MASS. — North America's oldest plastics injection molder, 150-year-old Summit Plastic Solutions Inc. of Florence, Mass., will become part of PMC Group Inc. of Stockerton, Pa., on Oct. 21.
Paritosh M. Chakrabarti, owner and chief executive officer of PMC Group, announced the closing date after U.S. Bankruptcy Judge Henry J. Boroff in Springfield approved the $5.2 million purchase.
Chakrabarti made the offer to buy Summit and its Florence, Mass.-based Pro Corp. unit in September.
Following the Oct. 15 court hearing in Springfield, Chakrabarti said he would have upped his bid to $6 million if any other contenders had come forward.
Joseph H. Baldiga, a Worcester, Mass., lawyer who represented unsecured creditors at the hearing, said that under an agreement being filed with the court, $75,000 from the sale will be set aside for claims filed by unsecured creditors.
The unsecured creditors that Baldiga had represented withdrew their objections to the sale prior to Boroff granting approval. Presto, a Stamford, Conn., custom molder, also withdrew its objections. That company was the largest unsecured creditor, with claims in excess of $900,000, according to Joseph Reinhardt, a Springfield, Mass., lawyer who represented the firm.
Expounding on that agreement during recess, Baldiga explained: ``The sale price is not enough to satisfy the claims of the secured creditors, which means, absent of some agreement, the unsecured creditors are likely to see nothing.''
The unsecured creditors include vendors, suppliers and employees, as well as secured creditors whose claims exceed monies provided by the sale. The first secured creditor cited in court, Chicago-based LaSalle Business Credit, had a claim of $6.1 million.
According to the debtor schedule in Summit's bankruptcy filing, the company had debts of roughly $16 million and assets of more than $16 million. However, Baldiga said Chakrabarti's purchase combined with the earlier sale of Summit's plant in Daytona Beach, Fla., which went for $1.5 million, yielded a total of about $7 million — $9 million short of the original debt estimate.
Summit reported 1996 sales of $32 million.
More than 45 parties expressed an interest in purchasing the Florence factory following Summit's filing July 15 for protection under Chapter 11 of the U.S. Bankruptcy Code. But despite the debtor's extensively advertised sale, Chakrabarti's bid remained unchallenged in the courtroom.
Chakrabarti said the next three months will be ``a period of adjustments'' at Summit's Florence plant, necessitated by deteriorating business. However, he said by June the company's employee pool will be back to its current level of about 150. By the end of 1998, employment probably will reach twice that number, he said.
Chakrabarti said he would make $350,000 available ``to fix immediate problems'' at the plant, which will be renamed Pro Corp.-PMC, retaining both its history and the Pro appellation first appended nearly a century ago. The plant assumed the Summit name in November 1995 when it consolidated resources with the plant in Daytona Beach, formerly known as Apogee Plastic Technologies.
Chakrabarti said headquarters for PMC Group, which encompasses a diverse group of plastic firms, will move from Stockerton to Philadelphia before the end of November, pending purchase of a 15-story, 55,000-square-foot downtown office building.
Chakrabarti articulates his vision for PMC Group as the creation of ``a new kind of global corporation — a corporation with a soul and one that acts as an engine for regional economic growth ... a corporation that exists primarily to promote common good by creating social values.''
``A man is not just sex and hunger,'' said Chakrabarti, ``nor should a corporation be just sales and profit. ... [Corporations] should live by a social compact, not only to create profit for shareholders, but to [promote] corporate responsibility for social good.''
