Bids to buy Austin Packaging due Monday; auction slated for WednesdayPublished 8:16am Friday, June 14, 2013
Companies looking at taking over the Austin Packaging Company will submit their bids on Monday.
From there, an Auction on June 19 will determine the new owner of the company, which will be approved in Mower County Court on June 20. That new owner will close the sale the week of June 24.
APC has operated under the interim management of Tony Natale, of Shepherd Partners Inc. of Chicago, who has worked to stabilize the company’s dire financial situation after owners Jim Heimark and Jeff Thatcher filed for receivership on April 10, several weeks after shutting down APC’s frozen pizza department and laying off 76 employees. Since that time, Natale, APC owners and Wells Fargo Bank hashed out a plan, which was approved in Mower County Court, to sell the company’s assets and pay off its debts. As of last month, according to court documents, APC had a $2.9 million balance on a Wells Fargo line of credit, $1.9 million in unpaid equipment loans, along with trade creditors asserting claims for a total of $5.8 million as of April 30.
In May, a prospective buyer set the first bid at about $5.6 million and agreed to assume various debts and obligations.
Natale said six to seven potential buyers have toured APC’s facility, which houses frozen food and sauce production, and he still suspects whoever takes over the company will continue production. He added those who have seriously considered buying APC are with existing food manufacturers that are larger than APC. Therefore, Natale doesn’t expect significant layoffs or restructuring of employee contracts, as the potential buyer will have been through this process in the past. When a company closes the sale, current employees will be terminated from APC contracts and will have to agree to terms with their new employer. However, Natale suspects most employees will continue to work at the facility without changes.
“We don’t anticipate any interruption in production,” Natale said. “I expect people would be working [throughout the sale closing].”