A bankruptcy court trustee wants to block a long-delayed deal to sell HPM Corp. assets to Taylor's Industrial Services LLC.
Meanwhile, Taylor's now employs 100 at its HPM Division in Mount Gilead, Ohio, and the company's top official does not think the court action will scuttle the $10.5 million deal.
Taylor's had announced July 30 that it had reached an agreement to buy the assets of HPM from Fleet Capital Corp. At the time, HPM had been struggling financially and had been closed for a month. Taylor's bought only the assets - the company did not assume any of the financial liabilities of HPM Corp., which filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Columbus, Ohio, right after the asset sale.
In October, court trustee Sara Daneman filed a separate lawsuit in the same court asking Judge Barbara Sellers to void the sale as ``commercially unreasonable.'' The complaint claims the HPM assets are worth more than $10.5 million. She also claims other buyers have expressed interest in buying HPM.
Daneman, a lawyer in Gahanna, Ohio, did not return telephone calls seeking comment.
A top HPM executive and a lawyer representing Fleet both say no new buyer has expressed interest in the maker of injection molding machines, extrusion lines and die-casting machines. Taylor's HPM Division is taking orders, building machines and supplying spare parts and service, said Christopher Filos, president and chief executive officer.
``I started with 11 people. Now we're up to 100 in five months,'' Filos said.
Filos said he has appraisal documents that show the $10.5 million price was fair.
Harry Wright IV, Fleet's Columbus lawyer, said Daneman is trying to do her job by representing unsecured creditors.
``She wants to find a buyer, but to our knowledge no buyer has been forthcoming,'' he said.
One entity looked at the business in November, but nothing happened, he said.
Wright said Fleet's response has been: ``If you think there's another buyer, bring them to the table. My client wants to be paid off; who writes the check is not something that concerns us.''
Filos also has not heard of any other interested buyers: ``No, there's nobody else,'' he said.
``Something came up for sale, it was accepted, it was done by Ohio law,'' Filos said. ``I paid for those assets and it's pretty much now that, if there's a problem, the problem is with Fleet and the trustee.''
The court still has not approved the sale. Fleet agreed in October not to complete the sale to Taylor's until the trustee had a chance to find another buyer who would pay more.
Wright said HPM Corp. owes $10 million to Fleet, HPM's largest creditor. Since Taylor's agreed to pay $10.5 million, that leaves little money for unsecured creditors.
Fleet was in charge of HPM because it had taken over control from its previous owner, an investor group headed by Los Angeles businessman Parviz Nazarian. Fleet had a lien on equipment, inventory and accounts receivable from loans it made to HPM. HPM defaulted on the loans, and the machinery company granted Fleet a mortgage to the business in March, according to court documents.
Taylor's Industrial Services in Hobart, Ind., also operates a heavy hauling business and makes large industrial machinery.
Against the backdrop of legal wrangling, meanwhile, Filos just wants to get HPM moving again. ``Currently we're making all existing product lines. Nothing's changed,'' he said. ``We're quoting on some very large injection molding machines right now.''