Cornerstone Products Inc. of Durant, Okla., will liquidate its assets under Chapter 11 of the U.S. Bankruptcy Code after a Dec. 1 court ruling.
Judge Brenda Rhoades ruled that the case won't be converted to Chapter 7 liquidation, under which a trustee would have been appointed. Instead, Cornerstone now can do a fast-track sale. That plan has to be submitted to U.S. Bankruptcy Court in Dallas by Dec. 9.
Cornerstone had filed a motion Nov. 21 for a fast-track sale. But the move was opposed by creditors Pilot Plastics Inc. of Peninsula, Ohio; Bloom Industries Inc. of Warren, Ohio; and Champion Molded Plastic Inc. of Warren, Ohio, which tried to have the case converted to Chapter 7 liquidation. Those firms said in court filings that the fast-track sale was inadequate to protect the interests of creditors.
Cornerstone had outsourced some of its production to other domestic mold makers and molders. The latest court ruling means that molds held by Bloom, Pilot and Edge Plastics Inc., of Mansfield, Ohio, can be marketed as part of the sale by auction house Stopol Inc. Pending approval from the molders, Cornerstone can liquidate the molds and have the assets placed into separate accounts, lawyers said.
``The molds cannot be taken from the molders, but they can still be marketed by Stopol,'' said Mark Castillo, a Dallas-based lawyer representing Pilot and Edge.
``I think it helps that the court is recognizing that the molders have a very serious interest in getting the highest value for their property,'' Castillo said by telephone Dec. 5. ``It's good that the court isn't going to force the molders to give up those molds.''
Cornerstone lawyers did not return calls by press time.
Stopol of Solon, Ohio, will first conduct a private sale, developing a catalog of equipment and moving into an online auction before holding an on-site live auction at Cornerstone's plant in Durant, court documents said.
The live auction is tentatively set for Feb. 8. That auction will include nearly 40 late-model Husky, Cincinnati Milacron, HPM and Engel injection presses from 300-3,000 tons, according to Stopol. The event also will feature toolroom equipment and accessories, including hoppers, conveyors and more than 200 molds.