Aurora, Ohio-based Omega Polymer Technologies Inc. has filed for Chapter 11 bankruptcy protection and, after already selling one division, is weighing the sale of its two remaining units.
In its Aug. 21 filing with U.S. Bankruptcy Court in Erie, Pa., Omega blamed its downfall largely on hikes in resin prices. To keep its largest customers, the filing stated, Omega was forced to give discounts, which cost the company an estimated $1.8 million between January 2004 and June 2006.
Omega's bankruptcy filing also comes partly as a result of the Chapter 11 filings of two of its big customers, automotive supplier Delphi Corp. and Transmatic Inc., a Michigan-based maker of dust-control equipment, interior panels and other products.
Omega listed liabilities of $23.6 million and assets of between $10 million and $50 million. It generated 2005 sales of $46.9 million.
According to the filing, Omega is not able to ``service its existing debt structure or make the capital investments necessary to continue in business.''
Guy Fustine, lead bankruptcy lawyer for Omega, said the company is selling its assets.
The first sale occurred Aug. 3, when Omega sold most of the assets of its Viking Plastics Inc. injection molding division in Corry, Pa., for $4.6 million, Fustine said during an Aug. 23 bankruptcy hearing in Erie.
Plastics News previously reported that the buyer was Kelly Goodsel, who had served as Viking's president and chief executive officer since 2000. Viking, which does complex post-molding assembly, makes automotive fuel system connectors, sealing closures and other parts for automotive, commercial and residential air conditioning, and components for the appliance, electronics/telecommunications and industrial markets.
Fustine said talks are ongoing with suitors interested in Omega's two remaining divisions: Omega Pultrusions Inc., which makes products including window and door frames and lighting fixtures, and Carsonite International Corp., which supplies safety equipment for the highway and recreation markets.
``We are working hard to maintain the company as a going concern from an operational standpoint and, simultaneous with that, we are having discussions with interested purchasers,'' Fustine said. ``But we are doing our best to act quickly to either reorganize or sell before the business deteriorates.''
Omega has until Dec. 19 to file its plan of reorganization with the court. Two messages seeking comment at the company's Aurora headquarters were not returned last week.
Omega currently employs about 225. In addition to its Ohio operations, Omega has two plants in South Carolina.
Some job cuts have taken place at the company, though bankruptcy court documents did not specify how many positions have been eliminated.
Both financial and strategic candidates have looked at buying Omega's assets, according to the bankruptcy record.