Investment firm GGC Acquisition LLC is the leading contender to buy bankrupt plastics compounder Gitto Global Corp., with a bid of $8.55 million.
U.S. Bankruptcy Court Judge Joel Rosenthal accepted the bid on Nov. 10. Boston-based GGC is an affiliate of venture capital firm CHS Capital.
The court is seeking additional bids and has set a deadline of Dec. 6 as the final day to make an offer. If further interest is generated, a court-approved auction would be held Dec. 8, with the closing set for on or before Dec. 18.
GCC would not take on any of Gitto Global's debts, which are at least $50 million.
The sale would include all company-owned equipment, including six production lines, as well accounts receivable, inventory, customer lists, contracts and any transferable intellectual property. Further information is available by contacting Lawton Bloom at Argus Management Corp in Grafton, Mass.
Lunenburg, Mass.-based Gitto Global filed Sept. 24 for Chapter 11 protection from creditors. The firm had stopped production and laid off its 75 employees Sept. 17. Company officers Gary Gitto and Frank Miller resigned that same day. The firm reopened about a week later after obtaining emergency financing.
In a filing with U.S. Bankruptcy Court in Worcester, Mass., a lawyer handling the firm's restructuring estimated that Gitto Global had been overstating its sales for several years. Most recently, Gitto Global officials said the firm's annual sales were around $100 million, when in reality they were no more than $40 million, according to the affidavit filed by lawyer Thomas Doherty.
According to court records, Gitto Global's top debts include $19 million to LaSalle Business Credit LLC, $5.2 million to Orix Financial Services Inc., $3 million to Clinton Savings Bank and $1.4 million to CIT Group/Equipment Financing Inc.
Gitto makes proprietary compounds based on PVC, polyethylene, polypropylene, thermoplastic olefins and other specialty resins. The firm sells into a number of markets, with wire and cable and medical being the most prominent.
Plastics News correspondent Frank Antosiewicz contributed to this story.