Denman Says It May be Forced to Close February 23, 2010
Troubled Denman Tire Corp. announced this afternoon that it may close.
The 90-year-old OTR and industrial tiremaker is still seeking a buyer, but has put the wheels in motion to shutter its entire operations, including its plant in Leavittsburg, Ohio, and warehouse in Austintown, Ohio.
In a statement released by the company today, Richard Szekelyi, restructuring advisor, said, “Unfortunately Denman was a victim of the downturn of the economy. As a result, the company has reached the difficult decision to begin reducing operations while we continue our efforts to secure financing and/or find a buyer. If these efforts are unsuccessful, there will be no other alternative but to close all of the operations.
“We have informed our employees, union representatives, appropriate elected officials and other interested parties of this tentative closure in accordance with the Worker Adjustment and Retraining Act of 1988.”
Over the last 10 months, Denman’s board of directors had undertaken “exhaustive efforts to refinance the company’s debt or secure a buyer in order to continue operations,” the statement read.
“We have been working very hard to find a new owner and to raise necessary capital to continue operations. We also sought governmental support. If these efforts had been successful, Denman could have been a viable company,” Szekelyi said.
If the company is forced to close down, some 260 employees will be terminated, and Denman’s assets will be relinquished to the company’s lender for liquidation.
“We hope the sale process is successful. If not, we hope to accomplish the cessation of operations and shutdown with the least possible disruption to the lives of our employees and the communities in which the company did business,” Szekelyi concluded.72;
Earlier this month, Denman employees were sent home from work and told not to return until further notice. A subsequent meeting with USW members revealed that the Denman’s bank had refused to extend any more credit to the tiremaker.
In March 2009, Denman owner Sandy Pensler said Denman would close its doors unless it received $3 million in government bailout money to purchased new equipment. That came on the heels of Denman laying off some 85 workers in early 2009; another round of layoffs came in late 2009.
