Gossen Corp., a manufacturer of PVC building products, has closed after 88 years, putting about 140 employees out of work in Wisconsin and Georgia and the business under the control of a court-appointed receiver, who is seeking repayment of at least $4.4 million of outstanding debt.
About 95 workers lost their jobs Nov. 1 at the company's facilities in Glendale, Wis., and another 45 in Cartersville, Ga. Gossen operated a manufacturing plant and warehouse in each city.
All assets of the businesses are now for sale even as the owners take steps to find capital and investors to salvage their business, according to C.J. Murray, a lawyer working with the receiver, Michael Polsky, at the Milwaukee law firm of Beck, Chaet, Bamberger & Polsky.
“There's kind of some dual tracks here with the company trying to secure financing to restart operations though the receivership proceeding, which is allowed to occur,” Murray said. “You can operate while being court supervised. That's still being explored at this point, and at the same time we're contacting competitors and people in the industry about purchasing all or a portion of the assets. In any event I imagine a sale — hopefully as whole — would probably occur in the next 45-60 days.”
Right now the only known creditor is First Business Capital Corp. (FBCC), which issued several loans to the business in 2012. FBCC turned to the Circuit Court for Milwaukee County on Oct. 14 — a day after Gossen officials gave notice they would not meet payroll obligations — saying the business is insolvent or in imminent danger of insolvency.
FBCC asked the court to appoint Polsky as the receiver for both Gossen and Butterfield Holdings LLC under Chapter 128 of Wisconsin statutes. The Butterfield family purchased Gossen in 1985. Frank Butterfield III was named president in December 2015. The two business entities and Butterfield are listed as defendants in a lawsuit filed by the bank with Gossen and Butterfield Holdings as the borrowers and Frank Butterfield as the loan guarantor.
Phone calls and emails to company officials were not immediately returned.
Chapter 128 allows for a debt consolidation plan as an alternative to federal bankruptcy. Polsky filed a notice of receivership on Oct. 27 and set a deadline of Jan. 27 for any other creditors to file claims.
“We know the bank is owed about $4.5 million. There are many other creditors but we don't have a good handle on all that right now,” Murray said.
The receiver has control over all assets of the borrowers, from machinery and furniture to trade names and intellectual property, and the power to liquidate them to settle claims.
“We're hopeful there will be money to pay the bank off and at least a portion of the unsecured debt. I think it's unlikely people will be paid in full,” Murray said.
Gossen was founded in 1928 by Martin Gossen, who invented the first spring-loaded window sash balance, which eliminated the need for counterbalancing weight systems for windows, according to the company website.
In the 1960s, Gossen Corp. was the first North American company to use cellular PVC, the website also says. The business expanded into PVC decking, railing and trim boards in addition to window components over the years.
Gossen ranked at No. 69 in the most recent Plastics News survey of North American pipe, profile and tubing extruders, with estimated sales of $40 million.
Murray said the receiver is charged with maximizing the value of all assets.
“We don't have a lot of answers about why we got to this point. Our job is to try to make the best of the situation,” he said. “In a good case scenario, we're selling it as a going concern or a whole, but the market will tell us what everything is worth.”