Buyer could end massive local bankruptcy

Nov 07, 2009 (The Meadville Tribune - McClatchy-Tribune Information Services via COMTEX) -- ESMK | Quote | Chart | News | PowerRating -- Portions of CORE Manufacturing Inc. --once one of Crawford County's largest manufacturing employers -- are expected to be sold in U.S. Bankruptcy Court in Erie next week for at least $3.5 million.

A proposed private sale of some CORE Manufacturing affiliates -- Excalibur Machine Co. Inc., Camelot Consolidated Inc. and Blade Transportation Inc. -- to Esmark Inc. of Chicago for $3.5 million plus an additional $100,000 for fees is scheduled to be presented to a federal bankruptcy judge Friday.

"The sale is as a going concern -- those businesses will continue to operate and, hopefully, grow again as the economy continues to improve," said Guy Fustine, the U.S. Bankruptcy Court trustee handling the CORE Manufacturing case.

However, the bid potentially could go higher if other qualified bidders come forward, Fustine said. Qualified bidders have until 5 p.m. Tuesday to make themselves known, Fustine said.

If other qualified bidders do decide to bid at Friday's hearing, bidding would start at $3.5 million and the next bid would have to be $3.65 million plus the additional $100,000 for fees, Fustine said.

Calls to CORE Manufacturing's headquarters in Saegertown Friday weren't returned.

Excalibur makes parts for power generation and transportation markets while Camelot Consolidated is a sales company and Blade Transportation is a trucking company, Fustine said.

Esmark Inc., with headquarters in Chicago, is a diversified private holding company created in 2003 to house the investment and philanthropic activities of James P. Bouchard, and his brother, Craig T. Bouchard, according to the company's Web site.

Its divisions include oil and gas exploration, aviation, real estate, technology and sports management, according to the Web site. It began in 2003 with interests in the steel industry and became the fourth largest American steel producer before selling that business in 2008. The company has recently announced its re-entry into the steel industry, according to the Web site.

CORE Manufacturing and its affiliated firms ended up in U.S. Bankruptcy Court after filing for Chapter 11 bankruptcy protection in January, citing more than $17 million owed to creditors and vendors. CORE blamed the nationwide financial crisis and credit crunch as the reason for filing.

It had been attempting to establish a plan to restructure and repay the debt, but lenders and creditors counter-filed in efforts to get paid back and to convert CORE's Chapter 11 filing to a Chapter 7 filing . A Chapter 7 filing forces a liquidation of the firm's assets.

This fall, most lenders and creditors agreed to allow CORE time to pursue the sale of some operations, but lenders and creditors had the right to pursue Chapter 7 to liquidate other operations.

Other CORE affiliates -- Multi-Tool and Multi-Plastics of Saegertown and Sipco Inc. of Meadville -- aren't part of the Friday's pending sale and are set to close, Fustine said. He didn't have closing dates for the firms.

Multi-Tool and Sipco were tooling and machining firms while Multi-Plastics was a plastic parts maker.

"Those firms are liquidating as part of our agreement with the banks," said Fustine. "They're finishing up orders and winding up operations."

At the start of 2009, CORE's affiliate companies had about 320 employees. It currently has less than 100 employees among all those firms, Fustine said.

Keith Gushard can be reached at 724-6370 or by e-mail at kgushard@meadvilletribune.com.

Sipco building sold

The former Sipco Inc. property at 1099 Morgan Village Road was sold Friday at a sheriff's sale.

The property, that once housed one of Crawford County's leading tool and die firms, was sold for default on a $568,000 loan from Mercer County State Bank, according to records at the Crawford County Courthouse.

Mercer County State Bank bought the property and an empty one-story 22,374-square-foot building and another empty one-story 2,000-square-foot building for a net cost of $22,482.26.

The bank is owed $626,205.85 in loan principal, interest and fees, according to records at the Crawford County Courthouse.

The Mercer County State Bank loan was taken out by Sipco Inc. on Sept. 20, 2006, but the loan subsequently came under the CORE Manufacturing umbrella after Sipco's then-owners, brothers Larry and Lon Sippy, sold the firm.

Eric Hoover, owner of Excalibur Machine of Conneaut Lake, bought Sipco from the Sippys for an undisclosed sum and merged it with Excalibur Machine in October 2006.

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