Compounder Gitto Global Corp.'s bankruptcy case has expanded to include Tradex Corp., a separate company owned by Gitto Global founder Charles Gitto Jr.
Tradex, based in Leominster, Mass., filed for Chapter 11 protection from creditors Feb. 16 in U.S. District Court in Worcester, Mass. According to court records, Tradex's assets and debts each are valued at between $1 million and $10 million.
Tradex owns the property in Lunenburg, Mass., that housed the compounding plant run by Gitto Global until its bankruptcy in late 2004. Clinton Savings Bank - which is owed more than $3 million in the case - had planned a Feb. 16 sale of the property, but the sale was halted when Tradex made its bankruptcy filing earlier that day. The estimated value of the property is $2.7 million.
Court records said Tradex had guaranteed the debt of Kingsdale Corp., which was owned by Gitto executive Frank Miller. In filings made late last year, Gitto's lenders said Gitto had inflated its financial reports through numerous fraudulent sales to Kingsdale. Gitto had claimed annual sales of $100 million, when its actual sales were no more than $40 million. Gitto's total debt was estimated at more than $50 million.
The Gitto Global business was sold for almost $9 million in December to a firm owned by Steven Graham, who also owns Toner Plastics, a maker of plastic craft supplies in Agawam, Mass. Graham now operates the compounding business as S&A Specialty Polymers.
Neither Charles Gitto nor his lawyer, Lawrence Green of Boston, could be reached for comment. Gitto launched Gitto Global after selling his original firm - Leominster-based PVC compounder Gary Chemical - in 1990. His son Gary also had been an executive with Gitto Global.
According to local media reports, S&E Specialty Polymers is interested in acquiring the Lunenburg property from Tradex. S&E officials could not be reached for comment.