APC owes $10 million, files for receivershipPublished 11:05am Tuesday, April 16, 2013
Austin Packaging Co. is taking steps to refinance its debt totaling roughly $10 million in hopes of avoiding bankruptcy.
APC filed for receivership on April 10 in Mower County District Court, but co-owner Jeff Thatcher said the move, which is the first step in the process of bankruptcy, is part of the plan to restructure and refinance its debt.
“A lot of people might think we’re filing for bankruptcy, but we’re not,” Thatcher told the Herald Tuesday morning. “We do not intend to take the next step, which would be bankruptcy.”
APC owes $1.54 million to Wells Fargo and $1.9 million to a Wells Fargo affiliate as of April 3, according to Mower County court documents. The company also owes $6.74 million to vendors in unsecured debt, court documents state.
The company took in gross revenue of about $70 million in 2012, and estimates about $30 million in 2013, according to court documents.
Thatcher said they are still on track to negotiate with the bank and refinance, and “definitely do not” plan to close.
“We’re definitely moving forward with the same original plan,” he said.
APC announced in March it would lay off 125 employees, or half of its workforce, but later decreased the number to 76. Employees at every level, from line workers and mechanics to managers and supervisors — largely from the pizza division — were affected by the layoffs, which went into effect March 29.
The move came as the company eliminated its frozen pizza manufacturing business, citing a year and a half of significant decline in the frozen pizza industry, the company said at the time. APC manufactured Nestlé-owned pizzas such as Tombstone and DiGiorno, but said it is now focusing on manufacturing frozen and liquid sauces, such as cheeses, gravy, Alfredo and Asian-flavored sauces.
The company met with city of Austin employees, Riverland Community College and Workforce Development Inc. to set up skills analysis and training for laid-off employees.
The manufacturer now has roughly 175 employees, down from 250 at the beginning of 2013 and 305 at the beginning of 2012.
APC will have a hearing today at 1:30 p.m. in Mower County District Court.