Barber & Ross Looks for Bankruptcy Options
Barber & Ross Co. has filed a petition to shift the involuntary Chapter 7 bankruptcy petition it’s facing over to the realm of a Chapter 11 bankruptcy proceeding, allowing the owner to reorganize the company. The window, door and millwork producer is facing many creditors, including banks, suppliers, tax agencies and employees, according to the local newspaper, The Winchester Star.
Chapter 11 status would allow owner David Joffe to file his own plan for reorganizing the business, rather than putting it in the hands of a third-party trustee under Chapter 7.
Barber & Ross abruptly closed the doors to its Winchester, Va., plant in June, leaving 400 stunned employees out of work. Under the federal Work Adjustment and Retraining Notification or WARN Act, the jobless employees are organizing a class action lawsuit seeking from the company 60 days of back pay and owed vacation, bonuses, health insurance and retirement contributions, the local paper also reports.
The June closure came at the hands of Wachovia, the window and door manufacturer’s biggest creditor, freezing its accounts receivable. The bank says Barber & Ross owes it about $24 million. Suppliers in the mid-Atlantic region teamed up to file the involuntary bankruptcy petition, owed $1.1 million collectively. Additionally, the company owes the local government more than $80,000 in back taxes.
Joffe’s lawyer told the Winchester Star that the owner is attempting to secure financing to re-open the company. “After careful consideration, Barber & Ross has determined that the maximum return to its creditors and shareholders can be best achieved through a voluntary Chapter 11 proceeding,” states Stephan Milow, Joffe’s attorney, in a motion.
The company’s former headquarters in Winchester has been listed for sale, the paper reports. Joffe is asking $13 million for the property, which is currently assessed at $9 million.