Chapter 7 of the bankruptcy code allows for the orderly liquidation of assets rather than a reorganization, as is the case in Chapter 11 bankruptcies.
Sovereign Bank, which is owed $2.76 million and has a blanket lien on all of North American Specialty Glass' assets, was in the process of negotiating a sale of the company to Dynamic Industrial Group L.L.C., an Indiana company that competes with North American Specialty Glass. That sale was supposed to close the same day as the bankruptcy, according to a court filing.
Working quickly, the bankruptcy trustee, Robert H. Holber, reached a separate deal Saturday to sell the business to another private equity firm, Grey Mountain Partners, of Boulder, Colo., for $1.5 million, plus assumed liabilities.
Grey Mountain agreed to hire 90 percent of the workforce, but also said it could back out of the deal if too few workers agreed to come back.
It's common to secure an initial, so-called stalking horse bid designed to set a base for additional bidders, but this case is unusual because Holber is pushing for an expedited sale, one that would be approved by Oct. 15.
The trustee's emergency motion Monday described a "unique opportunity to save a business from complete liquidation while preserving at least 85 jobs in a small community near Quakertown."
Dynamic Industrial on Tuesday filed an objection to the proposed five-day sales process, but U.S. Bankruptcy Judge Bruce I. Fox agreed to hold a hearing Monday.
North American Specialty Glass was founded in 1963. The founding Bolton family sold the business to French industrial conglomerate Saint-Gobain in 1995, but still owns the building on Kumry Road.
Saint-Gobain, which has North American headquarters in Valley Forge, sold the business to Ironwood in 2005.
The Boltons told Holber, the trustee, on Oct. 3 that they would have been interested in taking over their tenant, North American Specialty Glass, if that could happen in "a few business days," according to Holber's motion.
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