Ormet Files Chapter 11 Bankruptcy
HANNIBAL – The Ormet Corp. has filed for Chapter 11 bankruptcy protection while it reorganizes and entertains a buyer, officials announced today.
It appears there is already an undisclosed agreement with a potential buyer to purchase the facility. Chapter 11 bankruptcy allows companies to reorganize and remain in business.
Attorneys for Ormet filed the case in federal bankruptcy court in Delaware on Monday, according to officials with the United Steelworkers, the union that represents workers at the Hannibal facility.
For members of the USW, official word of the bankruptcy filing came down today through Director Dave McCall, head of United Steelworkers District 1. McCall’s announcement to union members came a day after the official filing was made by representatives of the aluminum manufacturer.
McCall’s statement confirms the USW has been in contact with the company about the bankruptcy filing, but was not able to communicate details of the situation earlier “because of confidentiality concerns.”
“It is expected that Ormet will make the typical arrangements to continue paying wages and benefits to the work force and to pay suppliers and vendors. The USW’s attorneys will enter appearances in the bankruptcy case and will begin to monitor the case,” said McCall in his communication to union members.
“Our priority must be to remain at work and to perform our job duties as safely and effectively as always.”
Ormet last filed for bankruptcy protection in 2004, McCall said.
“We expect that this bankruptcy will be far different than the previous bankruptcy that occurred in 2004. In that bankruptcy the former owners attempted to implement a contract with huge wage and benefit reductions and it resulted in a 20-month long strike. The current owners have taken a different approach.
“Under the bankruptcy code, this sale will be subject to bids by other potential parties. The proposed buyer has agreed to assume our existing (collective bargaining agreement), with certain changes. These changes do not include wages, health care, vacation, holidays or seniority,” said McCall in his announcement.
McCall said union leaders will schedule information meetings in the near future to discuss the bankruptcy filing and any potential changes to the workers’ contract.
“Changes will be subject to ratification by the membership,” he said.