Ormet files Chapter 11
HANNIBAL – Ormet Corp. has filed for federal bankruptcy protection while it reorganizes.
It appears there is already some sort of agreement struck with a potential buyer who is waiting in the wings to purchase the facility.
Attorneys for Ormet filed the case in federal bankruptcy court in Delaware on Monday, according to officials with the United Steelworkers, the union which has historically represented 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 (Ohio).
McCall’s announcement to his unions members came one day after the official filing was made by representatives of the aluminum manufacturer.
Ormet filed for Chapter 11 Bankruptcy in the Delaware bankruptcy courts on Monday.
McCall’s announcement to local union members confirmed the USW has been in contact with the company about the bankruptcy filing, but were 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 workforce 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 issued today. “Our priority must be to remain at work and to perform our job duties as safely and effectively as always.”
“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. The company has entered an agreement to sell the business to a buyer which has proposed to buy the business.
“Under the bankruptcy code, this sale will be subject to bids by other potential parties. The proposed buyer has agreed to assume our existing CBA, with certain changes. These changes do not include wages, healthcare, vacation, holidays or seniority,” said McCall in his announcement to members issued early Tuesday, in the wake of Monday’s filing. “In the near future, we will schedule information meetings to discuss the issues. Changes will be subject to ratification by the membership.”
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ORIGINAL BREAKING HEADLINE:
HANNIBAL — Ormet Corp., has filed for voluntary Chapter 11 bankruptcy.
The Hannibal-based company filed the request on Monday in United States Bankruptcy Court.
In September 2012, layoffs were announced at the Hannibal Primary Aluminum Reduction Plant, and a month before that, Ormet had announced the closure of a second pot line, leaving just four in operation.
In August 2012, the electric costs for Ormet were raised by more than $20 million due to a ruling in the AEP Security Plan by the Public Utilities Commission.
CEO Mike Tanchuk said the voluntary Chapter 11 filing is a positive and necessary step for Ormet and is in the best interest of the company, the employees, suppliers, customers and other key stakeholders.