The recent Chapter 7 filing by a hydraulic door company, based in Cottonwood, Minnesota, has affected businesses across the U.S., other countries, company employees and local businesses, as reported by the Marshall Independent.
U.S. Bankruptcy Court documents show that the company filed for a voluntary petition and included their figures on assets, creditors and a financial statement. The petition listed assets of over $1 million and debts at over $7 million.
The statement estimated that there would be no money left over to distribute to any unsecured creditors.
The involuntary bankruptcy was filed in the Minnesota District of federal bankruptcy court in the beginning of March. By the end of March a judge had granted an order of relief for the petition.
The company’s facility in Cottonwood is currently closed and has been for several weeks.
Of the $1 million listed in assets, the hydraulic company has property in Cottonwood, “personal property” amounting to approximately $82,000 in their accounts receivable, $69,000 in shop equipment and $145,000 in their inventory of raw materials.
There are over 30 pages of listed creditors. Of the list, creditors are either grouped in a secured or unsecured category.
Unsecured claims – and considered a priority – are pay and benefits for the employees, and payment for state taxes.
Non-prioritized claims may include money owed for goods and services.
Thirty employees that reside in the southwest Minnesota area are listed as priority unsecured claims.
Per court documents, franchise taxes, or sales, are owed in several states: California, Florida, Minnesota, South Dakota and Texas.
Customers of the company are not listed, but over 200 businesses, or individuals, in the U.S., Canada and the U.K. are among the list of creditors owed.
Local debts listed include utilities and revolving loan payments to the city of Cottonwood, cleaning services, and claims from several businesses. The businesses listed in the bankruptcy are Cottonwood Co-op Oil, computers and Beyond, Henle Printing, KARZ Radio, the Marshall Independent, Signs Plus, Universal Forest Products and others.
When the company began leasing space at the Marshall Airport, from Schwan Food Co., they racked up another $37,000 in rent – which has now become a disputed claim.
The financial statement listed gross revenue at approximately $9.3 million in 2009, $8.3 million in 2010 and $3.2 million, to date, for 2011.
Also in the statement is a reported 19 lawsuits filed against the company – mostly from companies within Minnesota. Beyond those, there are also some suits filed from California, Texas, South Dakota, Iowa and Wisconsin.
Customers, which had paid in advance for a hydraulic door that was never received, are also affected by the bankruptcy filing.
If you are considering the need of a personal or business bankruptcy plan, contact a bankruptcy attorney for help as soon as possible. Early planning may lessen the pressure from lawsuits on top of a bankruptcy filing.