Kingsbury is up for sale
As published on page one of the Jan. 5, 2012 edition of the Keene Sentinel, and online.
Longtime Keene manufacturer Kingsbury Corp. may be sold by the end of the month.
A U.S. Bankruptcy Court judge in late December approved an auction of the machine tool maker, which for years was a major employer. The auction is scheduled to take place in Manchester Jan. 26.
An initial bid has been accepted by officials overseeing the auction for all of the company's assets except one -- its Keene headquarters.
Kingsbury filed for Chapter 11 bankruptcy protection in September. That filing stopped another auction -- of the company's equipment -- scheduled by creditors without the company's consent.
This auction, however, is likely to go ahead, according to attorney Robert J. Keach, who represents the company.
The company's property has been divided into three lots that can be purchased separately. One is the equipment; another is the company's Laurel Street headquarters; and the third is its "personal property" -- including its inventory, patents and customer list.
Optimation Technology Inc. has placed an initial low bid on the equipment and personal property portions of the auction.
Announcing a bid such as this in advance of an auction is a way to set a lowest possible sale price, called a "stalking horse" bid. The final sale price of these assets may be higher, according to Keach, a veteran bankruptcy attorney.
"The stalking horse bid is a beginning of a process; it is almost never the end of a process," he said.
There is no initial bid on the real estate.
The land and 300,000-square-foot building at 80 Laurel St. is valued at $4.2 million by Keene's assessing department, which completed a revaluation of commercial property last year.
There were some initial offers that included the headquarters, Keach said, but Kingsbury's representatives rejected those in favor of Optimation's offer on the equipment and personal property.
"It's not that there was not interest in the real estate, it's just that the interest came with conditions that were not acceptable," Keach said.
Optimation and other auction participants will have an opportunity to bid on the land and building at the auction -- without a minimum.
It's still possible one buyer will purchase all three auction lots and continue to operate Kingsbury as the subsidiary of a larger company.
In order to be in the room for the auction, potential buyers need to submit their qualifications and an initial bid to Keach by Jan. 23.
So far Optimation is the only bidder, but Keach said he expects that to change, and that it's customary in these cases for bids to come in at the last moment.
The sale has some of Kingsbury's creditors worried.
If the sale price is too low, they say, little will be left after the lawyers and the bankers running the auction are paid. That remainder is needed to pay other debts -- including back wages owed to employees who worked without paychecks last summer.
Keach said the employees should not give up hope.
"It is everyone's hope and expectation that as a consequence of the sale they would be paid," he said.
Objections filed in bankruptcy court on behalf of the employees and TD Bank, which holds the mortgage on 80 Laurel St., did not stop or alter the terms of the auction.
However, there will be another chance for objections after a sale agreement is reached.
Kingsbury pension recipients have less reason for concern, according to Keach. The pension fund is "largely funded," he said, and is also guaranteed by the federal Pension Benefit Guaranty Corp.
Kingsbury, which makes machinery for use in factories, was once one of Keene's largest employers.
It got its start as a toy manufacturer at the turn of the last century, and was owned locally until current owner Iris A. Mitropolous of Boston purchased it in 1998.
tagged with: bankruptcy, business, Kingsbury Corporation, manufacturing, real estate
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