Keene manufacturer Kingsbury files for Chapter 11 protection
As published on page one of the Oct. 4, 2011 edition of The Keene Sentinel and online.
A struggling local manufacturer filed for Chapter 11 bankruptcy protection Friday -- part of an ongoing effort to resurrect the company from beneath mounting debts and resume operations at what was once one of Keene's largest employers.
Kingsbury Corp. holds tens of millions of dollars in assets, according to paperwork filed in U.S. Bankruptcy Court in Manchester last week, but also owes tens of millions of dollars in debt that has accumulated over the course of the recent recession.
According to court documents, the company now employs 53 people, of whom all but 18 are on furlough. Employees are owed unpaid wages for several pay periods in July.
One of the company's primary creditors, Utica Leaseco, holds a lien on the machinery located in Kingsbury's Laurel Street headquarters and recently scheduled an auction of those assets for Oct. 11.
Kingsbury has operated in Keene for almost 120 years. It specializes in building large, custom-made, high-precision machines that are commonly used in other factories for mass production, and as recently as the 1980s employed hundreds of workers.
Owner Iris A. Mitropoulis told The Sentinel last month that she hoped to reach an agreement with Utica that would stop the auction.
Those negotiations were not successful, according to an affidavit Mitropoulis filed with the bankruptcy petition on Friday.
"Observing apparent recovery in other sectors of the auto industry, Utica did not understand that manufacturers of custom machinery such as (Kingsbury) would experience recovery on a somewhat more delayed basis," she wrote.
Nonetheless, the affidavit also describes Utica working with Kingsbury to offer extended deadlines on payment even after the auction had been scheduled.
In the past six months Kingsbury has been contacted by customers considering ordering machines worth millions of dollars, according to Mitropoulis.
But this hopeful report was not enough to stop the auction.
Chapter 11 bankruptcy -- the legal mechanism that helped save the U.S. automobile manufacturers that are among Kingsbury's biggest clients -- stops a company's creditors from collecting on debts while the court supervises a restructuring of the company. It also stops the company from spending any more money.
In first-day motions explained in her affidavit, Mitropoulis, who bought Kingsbury from local owners in 1998, asks the court to make certain exceptions to the rules that freeze the company's assets to allow the company to stay in business and -- potentially -- resume manufacturing operations.
In particular, she asked for permission to pay employees unpaid wages.
"Any further delay in paying (the employees) will damage the Debtor's relations with its employees and irreparably harm morale," Mitropoulis wrote.
tagged with: bankruptcy, economy, Kingsbury Corporation, manufacturing
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