Grocery chain Giant Eagle Inc. has closed its water and iced-tea bottling plant in Latrobe, Pa., three years after buying the former Le-Nature's Inc. plant out of bankruptcy court and now an auction is set for early February.
The modern, turnkey Latrobe plant was the former headquarters of Le-Nature's, a firm forced into bankruptcy in 2006 in a tabloid-like saga involving founder Gregory Podlucky and allegations of massive fraud, forgery and document shredding. A federal grand jury indicted Podlucky and four other men for allegedly defrauding lenders and investors by dramatically exag- gerating financial records at the maker of flavored water, fruit juices and teas.
In 2007, Giant Eagle bought the plant to make its own beverages. But Giant Eagle closed the plant in October, and will auction it off if a buyer cannot be found, according to a report in the Pittsburgh Tribune-Review newspaper.
M. Davis Group LLC, a Pittsburgh auction house specializing in selling food and beverage processing plants, will run the sale Feb. 3-4. Officials of Pittsburgh-based Giant Eagle did not return a call for comment for this story.
The Dec. 23 story in the Tribune-Review said Giant Eagle claims to be a minority owner, but the grocer has declined to name the majority owner.
The 300,000-square-foot plant includes 11 blow molding machines to make PET bottles and five PET preform presses. According to M. Davis Group's website, the auction would include two Krones blow molders, two Sidel machines, three Corpoplast machines and four SMI machines. The plant also has the blow molds, plus auxiliary equipment.
The Latrobe factory has three Engel injection presses, each with 500 tons of clamping force, and two 350-ton Netstals, plus 48-cavity and 96-cavity preform molds.
Giant Eagle renamed the former Le-Nature's operation Chestnut Ridge Beverage Co. Le-Nature's became a major scandal in western Pennsylvania. In 2009, Podlucky and the four other men were arrested and charged in U.S. District Court in Pittsburgh with using phony documents to mislead external auditors. Lenders and investors relied on the false information, and the indictment charged that LeNature's used the documents to get loans, equipment, leases and investments.
An investigation discovered that Le-Nature's audited results for 2005 reported $275 million in annual sales, but actual sales were as low as $32 million.
Podlucky and the other defendants are scheduled for trial July 5, according to a spokeswoman for U.S. Attorney David Hickton in Pittsburgh.