New Freedom Plastics auction set
The court-appointed receiver for the Janesville-based Freedom Plastics won approval Monday to schedule another auction for the company's assets in Wisconsin and Florida.
Fourteen hours of bidding last week resulted in a high bidder whose offer was "substantially less" than the $20 million Freedom owes its primary secured creditor, Bank of America.
After negotiations that stretched all last week, the bank said it would not consent to the sale. Receiver Michael Polsky asked Rock County Judge Kenneth Forbeck for the authority to schedule another auction next week.
Forbeck agreed over the objections of the Asheville, N.C.-based Silver-Line Plastics and the Atlanta-based Georgia Gulf Corp. The two companies had combined to submit what appeared last week to be the winning bid for Freedom.
The bank will now be asked to fund continuing operations at Freedom through a sale.
Mar 9, 2009 at 10:59 p.m.
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The employees should hear the news first before it hits the paper. Thats just common courtesy! Something we dont see much of anymore....
Mar 9, 2009 at 6:34 p.m.
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Not bitter, just frustrated.
Mar 9, 2009 at 4:39 p.m.
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CB210, how is this news to the employees that should be working like business as usual? There are so many things that go on outside of what employees see every day it would boggle your mind. Don't get bitter because you're not in the loop. This is business unfortunately!
Mar 9, 2009 at 4:04 p.m.
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Well, no, the receiver has no responsibility to the employees -- unfortunately. His duty is to make sure that the company's assets are used to satisfy the company's liabilities to its creditors. Selling it as a going concern will do that most efficiently.
Mar 9, 2009 at 2:50 p.m.
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The receiver is probably trying to keep the company as a whole and as an added benefit save jobs, as hopefully the whole is worth more then its parts.
Mar 9, 2009 at 12:26 p.m.
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gary, it isn't, necessarily, but in this round there was clearly a floor set. It probably isn't $20 million but is probably closer to it than bidders hoped. Bidders now have more information than in the past -- all of them know their bids were too low. They know that the bank is going to play hardball in this economic climate and they have to come to the table with their own debt service.
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The receiver has a fiduciary duty to try again. If the auction has no bidders, then liquidation is the next step.
Mar 9, 2009 at 11:32 a.m.
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Once again, the Freedom workers hear the news through the paper.
Mar 9, 2009 at 11:26 a.m.
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well that doesn't suprise me.
Mar 9, 2009 at 11:23 a.m.
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Why would the company be worth more this week than it was last week?
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