HPM Corp. has a new owner that will keep the brand name alive, but some creditors to the former owners now wonder if they will ever see their money.
HPM Corp. filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Columbus, Ohio, on Aug. 1. According to one creditor, the court filing claims its assets fall in a range from $1 million to $10 million and its liabilities between $10 million and $50 million. The company has between 200 and 999 creditors.
The Mount Gilead, Ohio-based maker of injection presses, extruders and die-casting machines endured months of layoffs as it tried to find a buyer. The factory shut down July 2. Then on July 30, officials announced that Hobart, Ind.-based Taylor's Industrial Services LLC reached an agreement to buy the assets of HPM. Under the deal, HPM will operate as a division of Taylor's.
Taylor's has started interviewing prospective employees in Mount Gilead.
In a Plastics News story published Aug. 6, a spokesman for Taylor's Industrial Services said the new owners purchased HPM's plant and equipment, work in process, finished goods inventory and intellectual property - but not liabilities. The Chapter 7 liquidation will wrap up that chapter for HPM.
Taylor's referred questions about liabilities to HPM Corp.
Taylor's Industrial Services bought the business from an investment team led by Los Angeles businessman Parviz Nazarian.
Little information was immediately available about the HPM Corp. Chapter 7 filing. John A. Gleason, the Columbus lawyer representing the firm, declined to comment. Harry Wright IV of Columbus, who represents creditors, including Fleet Capital Corp., was not available for comment.
For now, creditors - including companies that supplied parts such as castings and barrels for HPM machines - are unsure how to proceed. Until the bankruptcy judge names a trustee to oversee the liquidation, the vendors say, they do not know whom to contact about getting their bills paid.
Nazarian has kept a low profile and has been unavailable for comment.
One creditor, Usinor Industeel of Puteaux, France, on July 31 won a summary judgment for $221,600 from HPM in U.S. District Court in Cleveland. Usinor shipped three platens to HPM for a large die-casting machine and claims HPM refused to pay. Usinor's lawyer was not available for comment on how the bankruptcy filing impacts that judgment.
Three other HPM suppliers are not hopeful they will get paid - and some are angry.
``As a vendor, any company - whether it's HPM or anybody else - has to realize that vendors have to be given serious payment priority and not treat us like a piece of garbage. They need to pay their bills,'' said Ed Crist, president and owner of Component Manufacturing and Design Inc. of Brunswick, Ohio. He said HPM owes CMD $65,000 for screw tip nonreturn valves, a sizable amount for his 15-employee company.
Does Crist expect to see that money? ``As time goes on I feel it's less and less likely,'' he said.
Peter Cloeren, president and chief executive officer of Cloeren Inc., said his company is out $50,000 for a large sheet extrusion die.
``Right now, we're in the investigation mode,'' Cloeren said. ``Our hopes are minimal at best. Things like this on a personal basis irritate me, because you've got a very wealthy man in L.A. that doesn't concern himself with his responsibility to his suppliers.''
HPM owes barrel-supplier Xaloy Inc. less than $100,000, according to Gunther Hoyt, vice president of sales and marketing at the company in Pulaski, Va. ``It's not that bad,'' he said.
Going forward - looking beyond the debts - a big question is how the new owner will repair relations with suppliers and customers.
The executives from CMD, Cloeren and Xaloy all said they are open to supplying parts to the new owner, Taylor's Industrial Services - once they learn more about Taylor's.
``The new company will have to establish credit like anybody else,'' Hoyt said. ``Are we going to tag them with the nemesis of HPM? No. It's a new company.''
Crist said: ``I would consider it after I get a chance to sit down and talk to the new owners. I wouldn't expect to have a cloud follow them in the future.''
Peter Cloeren said his company will give Taylor's the benefit of the doubt. But the current sluggish machinery market and the fact that HPM stopped production means, ``they've got a challenge ahead of them,'' he said. ``How do you regain the customers' trust?''