Creditors' petition may push Glenshaw Glass into Chapter 7

A group of creditors yesterday filed a petition to push the closed Glenshaw Glass Co. into involuntary Chapter 7 bankruptcy proceedings.The company already is being liquidated under a receivership ordered in November by Common Pleas Judge Robert P.

Horgos, who acted on a request by mortgage holder PNC Bank.

David K. Rudov, who filed the Chapter 7 petition, said the federal bankruptcy court would be a better forum for his clients, three suppliers to Glenshaw who together are owed more than $1 million.

Rudov said the next step would be for the receiver, Margaret Good of The Meridian Group, to accept or contest the move. Good could not be reached for comment yesterday.

Glenshaw Glass closed in November, idling about 300 employees, after Good was unable to quickly find a buyer for the plant, which suffered substantial damage in September flooding. PNC's court filing said the company was in default of a mortgage valued at $11.5 million.

Rudov said the bankruptcy filing was no reflection on Good's work and requested that she be designated as the principal operating officer of the company under bankruptcy proceedings.

"I do not question Maggie Good's ability. She has been doing a great job in this case liquidating the assets,'' Rudov said. "We just think there ought to be other voices heard."

Rudov maintains that Good's responsibility as a trustee under the court-appointed state receivership are exclusive to PNC and are not necessarily in the best interests of his clients, who are unsecured creditors.

"I believe that the unsecured creditors and trade vendors have more comprehensive remedies under the bankruptcy code,'' Rudov said.

The three companies named in the petition are in the packaging business. They are Temple-Inland, of Austin, Texas., which is owed $951,989; Pro-Tec Partitions Inc., of Drums, Luzerne County, owed $91,186; and Terlyn Industries, of Pickering, Ontario, owed $10,557.

There was approximately $16 million in glass inventory stored at two warehouses when the company was put into receivership, according to Rudov, who said he was given that figure from an attorney representing the receiver. Much of that inventory, approximately $10 million worth, has since been sold, he believes. Other assets include the physical plant.

Lou Brudnock, president of Local 134 of the Glass Molders Pottery Plastics and Allied Workers Union, said the bankruptcy petition was not a surprise to him.

"This is something I expected,'' he said.

Some potential buyers apparently have expressed interest in the plant, which until its closure operated in the Glenshaw section of Shaler since 1895. It made bottles and other glass containers.

Brudnock said the last time he talked to Good there were four potential buyers that had expressed interest. He believes at least one of them has since pulled out of consideration.

Claudia Davidson, a labor lawyer who has done work for the glass workers union in similar cases, said she believes bankruptcy would be a more orderly open process than receivership and might help attract a buyer.

"The union considered initiating bankruptcy for the same reasons,'' she said. "If unsecured creditors like these guys have any shot at getting remuneration for unpaid bills, it's going to be in bankruptcy."

600450 Creditors' petition may push Glenshaw Glass into Chapter 7 glassonweb.com
Date: 4 February 2005
Source: Post-gazette.com

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