After closing three businesses in less than three years, Patrick Healy says he is done with the injection molding industry.
His string of failures landed him a criminal conviction and a night in jail back in 2000, and now a growing list of resin distributors say that Healy owes them money.
Healy's most recent purchase - Richland Molded Products of Lexington, Ohio - shut down Nov. 30, owing a Cleveland bank $900,000 and three resin distributors at least $100,000. Healy bought Richland from owners Jim Plew and Gene Zoll in late 2000.
Healy said by telephone he has found a buyer for Richland that will enable him to pay off his debt to Charter One Bank of Cleveland, as well as his debts to resin distributors Entec Engineered Resins, Michael Day Enterprises Inc. and Chem Polymers. He declined to identify the buyer.
As of Feb. 12, the Richland County Sheriff's Office had not been informed of the pending sale and was planning to go ahead with a March 7 asset sale of Richland's injection molding machines and other equipment, according to deputy Cathy West. Richland has 18 presses and reported 2001 sales of $2.6 million.
Michael Day Vice President John Targett said Healy owes the Wadsworth, Ohio-based distributor and compounder about $50,000 for nylon resin.
Paul Astolfi, a Cleveland lawyer representing Charter One, declined to comment on the case. Charter One spokeswoman Cindy Schulze said she had no information on Healy.
Healy blamed the closing of Richland - which Plew founded in the early 1980s - on the loss of a key customer, Jay Industries, a Mansfield, Ohio-based automotive supplier that had generated about 70 percent of Richland's business.
Jay President Rick Taylor said Jay pulled its business after learning of Healy's financial track record with injection molding firms in Michigan and New York. Jay Vice President David Benick went so far as to personally drive to Richland in December to retrieve Jay-owned molds that Richland had been using.
Taylor added that Jay ``had to scurry around'' to find molders to replace Richland. Jay took two jobs in-house, said Taylor, and sent the rest to K.A. Molded Products, a Mount Gilead, Ohio-based injection molder run by former Richland plant manager Alan Kleer, and to molder InnoPlas Corp. of Kenton, Ohio.
According to Healy, an ``almost identical'' situation, where a large customer took its molding in-house, led to the failure of Moxness Thermoplastics Inc. in late 2000. Healy had bought Stevensville, Mich.-based Moxness for $3.4 million in 1996. He previously had served as its controller.
Moxness then bought Haller Plastics Corp., a Farmingdale, N.Y., injection molder that had declared bankruptcy, for $1.5 million in 1999. Haller closed for good sometime between November 1999 and October 2000.
``It's been really difficult for injection molders in the automotive market,'' Healy said.
Healy said he has repaid all of his Moxness-related debts - including a $1.3 million debt for three loans from Bank One Michigan - but officials with three Michigan businesses disputed that claim, saying Healy owes them a total of $25,000.
Kevin Chase, owner of resin distributor Chase Engineering Plastics in Clarkston, Mich., said Healy still owes his firm about $12,000. Kirk Ford of resin distributor Ford Plastics in Otsego, Mich., said he is owed $10,000, while Larry Mitchell, owner of Buchanan Mold in Buchanan, Mich., said he is owed about $3,000.
Chase and Mitchell each have filed civil lawsuits against Healy in Michigan, but said they were not optimistic about recovering the debt.
``Once we found out Healy was at Richland, we said we'd never supply them with resin,'' Chase said.
Mitchell said he struck a deal in late 2000 with Healy whereby Healy was supposed to pay back half of what he owed to Buchanan Mold. Healy has paid back about half of that agreed amount, but he has not made any further payments to Buchanan Mold in more than a year. Mitchell's lawyer recently removed the Healy file from his law firm's list of active cases.
Mitchell estimated he has lost $12,000 from writing off Healy's debt and paying legal fees.
Bank One officials could not be reached prior to deadline to confirm Healy had repaid his loans. In May 2000, the bank had won a judgment in Berrien County Circuit Court in St. Joseph, Mich., requiring Healy to repay the debt by June 2000. In September 2000, a lawyer representing the bank told Plastics News that Healy did not make that payment.
Healy's debts landed him in jail in October 2000 when he was served a warrant on a bad check charge at his home in Stevensville. Emeric Szalay, owner of Northern Polymers, a resin distributor that Healy had not paid, contacted police after driving by Healy's home and spotting his car. Healy was held overnight and released after agreeing to pay Szalay half of his $95,000 debt.
Stopol Inc. of Solon, Ohio, brokered Healy's purchase of Richland. Stopol also sold Healy a pair of Milacron injection molding machines and appraised some of Richland's equipment for insurance purposes. Stopol President Neil Krutschke Jr. said his firm never had a problem in receiving payment from Healy, and added that he was unaware of any financial problems Healy had at Richland.
Healy first worked with Stopol in 1998 when he was at Moxness and looking for acquisition opportunities. Krutschke was unsure if Stopol was involved in Healy's purchase of Haller, the New York injection molder.
Alan Kleer and 17 other Richland employees lost their jobs in November. Kleer and his brother Kevin since have bought two used injection molding presses and founded K.A. Molded Products in nearby Mount Gilead, but most of the other former Richland employees remain unemployed.
Alan Kleer said he is trying to salvage some former Richland accounts to supplement the Jay Industries business he won.
Kleer, who served as plant manager for most of his 18 years with Richland, said he is skeptical of Healy's story about finding a buyer for Richland, mostly because of the way he said Healy ran the firm as its brief owner.
``[Healy] really messed up,'' Kleer said. ``[Richland and its employees] could have made millions for him. But he never paid his bills. Then he'd talk about having homes in the Bahamas and in Europe.''
When confronted by employees after bouncing a batch of payroll checks in early 2000, Healy said the checks bounced because he had changed banks, according to Kleer. By the time a second payroll bounced, Healy had almost stopped coming to the office entirely, Kleer said.
``This really hurt me big time,'' Kleer said of Richland's closing. ``All the years I was there, I ran the production but never got into the office side. I've really got an education in the last month and a half.''
Jay Industries' Taylor said he thought it was unusual that Zoll and Plew never told Jay they were selling Richland. Taylor also could not understand why Healy never visited Jay in the brief time he owned Richland.
``You'd think you'd want to meet your biggest customer,'' Taylor said. ``The whole thing was very weird.''
For his part, Healy said he would advise anyone who was looking to get involved in injection molding to diversify their sales base, unlike the heavy automotive focus his businesses had.
``You just have to make sure your customer concentration and market concentration are spread out,'' he said.