After being passed over in an auction to acquire Foamex earlier this month, Wayzata Investment Partners is appealing the sale of the company to MatlinPatterson, as reported in an article by Law360.
For background information, read “Wayzata Investment Partners lose Foamex, gain Caraustar” on Wayzata.com.
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An offer of $141.5 million for Wayzata Investment Partners to acquire Foamex International was challenged by lenders who are owed $325 million dollars by Foamex, a foam manufacturer that voluntarily filed for reorganization under Chapter 11 in February, according to several media reports.
After an order from Bankruptcy Judge Kevin Carey in Wilmington, Del., the auction for the company was restarted and sale was approved to MatlinPatterson and Black Diamond, over Wayzata Investment Partners. The company was sold for $155 million on Wednesday, May 27.
Reuters: “Foamex gets court OK for sale to MatlinPatterson”
RTTNEWS: “Foamex obtains court approval for sale to MatlinPatterson/Black Diamond Group”
Wayzata Investment Partners will become the controlling shareholder of Caraustar Industries, a manufacturer of recycled paperboard and converted paperboard products, according to a Caraustar press release on June 1.
Carustar Industries: Press Release
Packaging News: “Private equity to take over Caraustar after Chapter 11 filing”
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Dave Flessner of the Chattanooga Times Free Press is reporting that Wayzata Investment Partners has won an all night auction to purchase Propex, Inc, the world’s largest maker of carpet, concrete and industrial fabric backings. A bankruptcy Judge will still need to approve the transaction.
Here is a snippet from the article:
A Minnesota investment firm agreed Tuesday to pay $82 million to buy the assets of the bankrupt Propex Inc., one of Chattanooga’s biggest businesses. Wayzata Investment Partner outbid two rival investment firms during an all-night auction in Atlanta.
The buyers plan to complete the purchase in April and will maintain most of Propex’s staff and business operations, attorney Henry Kaim said in a bankruptcy hearing late Tuesday.
“They are going to continue to operate the company as a going concern and continue to do business,” said Mr. Kaim, a Houston attorney who represented Propex in the bankruptcy auction.
To read the full story, follow this link: Chattanooga: Minnesota firm buys bankrupt Propex
Stay tuned to Wayzata.com for all the latest Wayzata Investment Partners news.
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Law360 is reporting:
Objections have been filed to bankrupt Propex Inc.’s request to approve bidding procedures that could pave the way for an affiliate of the company’s debtor-in-possession lender Wayzata Investment Partners LLC to buy the construction materials manufacturer for more than $61 million.
Private equity firm Black Diamond Capital Management Inc. and BNP Paribas Securities Corp. each filed an objection to the debtor’s motion Monday, saying the proposed bidding procedures effectively “chill” competitive…
Law360 is a subscription based news source for lawyers. To view the article and invite to subscribe, follow this link: Lenders Fight To Block Propex Asset Sale Plan
None of the other major news sources have picked up this story as of yet, so it has yet to be confirmed from another source. Once another venue runs with it, I’ll let you know. Stay tuned to Wayzata.com for all the latest Wayzata Investment Partners headlines.
Reuters is reporting that Key Plastics, LLC is has emerged from Bankruptcy with Wayzata Investment Partners as the new controlling shareholder. Additionally, here is a copy of a press release from Key Plastics:
NORTHVILLE, Mich. , February 16, 2009 – Key Plastics L.L.C.,
* Key Plastics today announced the completion of its prepackaged reorganization, with an effective date of February 13, 2009.
* The reorganization resulted in the elimination of $115 million in secured debt and receipt of a $20 million new equity investment, with Wayzata Investment Partners LLC becoming the Company’s controlling shareholder. Additionally, the Company entered into a new, undrawn, $25 million credit facility.
Key Plastics L.L.C. (the “Company”), one of the leading manufacturers of engineered plastic components for the global automotive industry, announced that its prepackaged reorganization became effective on February 13, 2009. Consummation of the reorganization resulted in the conversion of $115 million of senior secured debt into equity and the closing of an additional $20 million equity investment. The investment was led by Wayzata Investment Partners LLC, which became the Company’s controlling shareholder. In addition, the Company entered into a new $25 million credit facility. Throughout its restructuring, the Company continued to satisfy its customers’ requirements in full on normal business terms, and all obligations owed to trade creditors, suppliers, and employees in the ordinary course were unaffected.
Ralph Ralston, President & COO of the Company’s North American operations, stated, “We are very pleased to announce the completion of our reorganization. We have completed the transition exactly on schedule and without disruption to our customers and suppliers, just as we had promised. Once again, we would like to thank our customers, suppliers, employees, new and old shareholders for their cooperation and effort during this transition. Our goal was to position ourselves to be one of the beneficiaries of our customers’ supplier consolidation strategies as the supply base contracts at a greater pace in 2009. We have achieved that goal, with Key Plastics now being largely debt free and maintaining very high levels of quality and delivery. Very few will be as well-positioned as Key Plastics to assist our customers during the inevitable rationalization of the supply base this year.”
About Key Plastics, L.L.C.
Key Plastics is a leading supplier of a broad range of highly engineered plastic components and functional assemblies to manufacturers of light vehicles and their tier one suppliers in North America, Europe, and Asia. In North America, the Company has strong market positions in door handles, pressurized fluid reservoirs, and other precision molded parts. In Europe, the Company has strong market positions in decorative bezels, center consoles, air vents and other mechanisms, decorative trim, and underhood technical components. Key Plastics employs approximately 4,100 personnel in North America, Europe, and Asia.
Stay tuned to Wayzata.com, you Wayzata Investment Partners can’t buy enough bankrupt companies leader.
CHATTANOOGA, Tenn., Jan. 29 /PRNewswire/ — Propex Inc. announced today that the United States Bankruptcy Court in Chattanooga overseeing Propex’s Chapter 11 cases today approved, on an interim basis, a $65 million DIP loan facility with Wayzata Investment Partners. The final hearing is scheduled for February 9, 2009, at 1:30 p.m. EST. This new lending facility envisions a sale of substantially all of Propex’s assets as going concerns on or before March 24, 2009. Propex stated at the court hearings that Wayzata is interested as a bidder in an auction process for substantially all of the companies’ assets, with the buyer continuing the operations of Propex after the sale and assuming certain liabilities, such as the employees of the ongoing operations and satisfying ongoing obligations to vendors and employees. The Chapter 11 cases are pending in the Bankruptcy Court for the Eastern District of Tennessee, Southern Division, before Chief Bankruptcy Judge John Cook, jointly administered under Case No. 08-10249.
SOURCE Propex Inc.
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Well, I didn’t know what to think of reports that local investment company and spin off of Cargill, Wayzata Investment Partners had purchased a large share of the Star Tribune’s secured debt. With articles and speculation flying after the recent Chapter 11 Bankruptcy filing by the Strib, it appears that the local juggernaut of investment firms may end up with controlling interest in the paper.
If there ends up being a strike on Lake Street by the Star Tribune Unions, I guarantee I will have a front row seat while sitting at Sunset’s having a burger and fries and watching all the mayhem, and you will be able to read about it here at Wayzata.com. Otherwise, stay tuned for all the latest developments regardless.
Lynne Baker, part of the United Steel Workers Communications department, emailed me today that Wayzata Investment Partners and the United Steelworkers Local 1189 came to terms regarding the Pope & Talbot Paper Mill that WIP purchased in a bankruptcy sale this June. Here is her press release:
FOR IMMEDIATE RELEASE October 20, 2008
Halsey, Oregon—Production and maintenance workers from United Steelworkers (USW) Local 1189 here overwhelmingly ratified a new six-year agreement with Cascade Pacific Pulp LLC on Oct. 16 that covers 95 workers. The contract will expire Oct. 31, 2014.
“We were able to get a contract because of the solidarity of our membership, our community allies, and USW brothers and sisters from Canada and Minnesota,” Jim Gourley, Local 1189 financial secretary, said. “They supported us in our rallies at Wayzata headquarters in Minnesota and at the plant gate.”
The union was successful in regaining main provisions of their former contract with Pope & Talbot at the site. The company filed for bankruptcy protection last year and the operations were purchased by Wayzata Investment Partners, a specialist in private equity and hedge funds, for $31.15 million.
“It’s been a very hard struggle to work with absentee owners,” Leon Harlson, president of Local 1189, said. “We were able to put enough pressure on Wayzata to get them to bargain with us. The contract we obtained addresses most of our issues.”
One of the most important provisions the union obtained is successorship. If Wayzata sells the pulp mill in the future, the new owner would have to abide by the existing union contract for the term of the agreement, and workers would get to keep their jobs. Since there was not a successorship clause in the old Pope & Talbot contract, the workers lost their jobs and had to reapply for them under the terms offered by the new owner.
Workers will receive a minimum 12 percent wage increase immediately upon ratification and will be paid the difference between their old wage rate and the new one for the five months they were without a contract. On November 1 in 2009 and 2010 they will receive a 2 percent general wage increase. In 2011, 2012 and 2013 on November 1 their wage increase will be based on the average of wage increases negotiated at other Pacific coast mills.
The company agreed to pay a 50-cent per hour shift differential for the 7 p.m. to 7 a.m. shift after ratification instead of its original proposal to start payment in 2009. An additional 25-cents per hour will be added Nov. 1, 2010 instead of a year later. The shift to earlier payment is significant because this provision affects about 75 percent of the membership.
Prior to the new agreement, workers had to pay 50 percent of their health care premiums. In the new agreement, workers will immediately pay 20 percent of the cost. This increases to 22 percent in 2010 and 25 percent in 2012.
Local 1189 was able to retrieve all the contract language under the old contract with Pope & Talbot except for a few minor modifications. Those with 15 years or more of service under Pope & Talbot and Cascade Pacific will automatically get five weeks of vacation without having to re-earn it under the new owner. Before the contract, workers were not paid if they were overlooked for overtime because managers did not follow seniority. If a manager disregards seniority now when assigning overtime, the overlooked person who should have been assigned it will get paid as if the manager had not messed up.
The defined benefit pension workers had under Pope & Talbot will be replaced by a USW 401(k) plan. Cascade Pacific will match up to 6 percent of a worker’s contribution beginning Nov. 1, 2008. This will increase to a 7 percent match on Nov. 1, 2011 and an 8 percent match on Nov. 1, 2012.
The USW represents 130,000 workers in the pulp, paper and forestry industry. It is the largest industrial union in North America, representing more than 850,000 workers in the U.S., Canada, Caribbean and Aruba.
For the complete story in chronological order, follow this link:
http://www.wayzata.com/search?q=steel+workers
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Found this on Youtube tonight. Now you know exactly what the workers perspective is in the USW march on Wayzata Investment partners last Friday.
So Elisha and I were well aware what was going on when we took a seat at Sunset’s against the windows facing Lake Street at about 11:40 last Friday, It was about 20 minutes prior to when reports from Marketwatch.com indicated that the United Steel Workers would march on the headquarters of Wayzata Investment Partners. The couple in the booth behind us wondered out loud what was going on with the heavy police patrol on Lake Street. Our waitress indicated that the Wayzata Police Department had called Sunset’s and indicated that their might be a large distraction.
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