Carried over from the Harrisburg Fire Expos thread.
For what its worth -
Thursday, April 02, 2009
Judge's decision puts Wolverine back to work
By Tim Ryan, Leader Reporter
A circuit court judge Wednesday gave some breathing room to Wolverine Fire Apparatus by clarifying an injunction imposed last month that had frozen the company’s bank account.
The injunction was originally filed along with a civil suit alleging Wolverine is in default on its agreement to purchase the assets of the defunct Elite Fire Apparatus Co. in Tilleda.
The suit filed by the receiver appointed for Elite seeks $1.77 million from Wolverine — or nearly $2 million with interest and late fees, according to court records — as repossession of collateral and foreclosure on the 66,000-square-foot manufacturing facility.
The motion requesting the injunction stated it was seeking to protect collateral securing the $1.77 million debt — including equipment, inventory, accounts receivable, real estate and other “intangible assets” Wolverine had purchased under the asset purchase agreement.
Attorney Paul Black, representing Wolverine in a hearing on the injunction in Shawano County Circuit Court Wednesday, told Judge James Habeck the injunction was being interpreted in a manner that had essentially shut Wolverine down.
“You’ve already put this company out of business for three weeks,” Black said.
Habeck said the intent of the injunction was to freeze only those assets owed the receiver, not to prevent Wolverine from doing business with assets and collateral owned independently of those purchased from Elite.
“I regret what’s happened to the business,” Habeck said. “I would rather have it operating and running.”
Habeck said, however, he had to balance that against the receiver’s right to pursue its claim and he delivered a stern lecture to Wolverine President Shane Williams, whom he said was “acting in very bad faith” by not allowing the receiver to inspect the property.
Williams asked for an opportunity to defend himself, but Habeck told Williams he had already heard from his attorney and would not listen to further comments from him.
“I have no faith in you,” Habeck said. “They gave you more time and you still didn’t comply.”
Black said the receiver was not given the opportunity to do an inspection because no one was available as a result of the previous court order.
“There was nobody there to let him in because of the injunction,” Black said.
Attorney Steven Jelenchick, representing the receiver, argued an inspection and inventory needs to be done to determine who owns what assets.
Black said there were significant assets owned by Wolverine from its operation in Michigan prior to buying the Elite assets.
Habeck let the injunction stand Wednesday, but said Wolverine could use assets and collateral not owed Elite. However, Habeck did not rule on the receiver’s motion for a default judgment in the case. A hearing has been tentatively set for April 22 on that motion.
Williams said after the hearing Wolverine could now go back to full operation after nearly a month with minimal staff.
“We’ve been going with a skeleton crew,” Williams said. “Now we can continue as normal.”
Some two dozen Wolverine employees, many of whom had been out of work the last three weeks, attended Wednesday’s hearing.
Williams - and Wolverine co-owner Mike Nelson - said after the hearing that Jelenchick had been given the opportunity to make numerous allegations about Wolverine’s financial condition without Wolverine being given a chance to defend itself.
Jelenchick said Wolverine was basically “insolvent,” and he said the company’s recent discussions with a bankruptcy attorney were proof of that.
Black confirmed to the court there had been talks with a bankruptcy attorney, but he said it was an option being considered primarily as a means of keeping the receiver from taking premature court action against Wolverine.
But as for Wolverine’s financial condition, Black said, the company has more assets than liabilities. He also noted the company had made $190,000 in the first three months of operation this year.
Williams said in a previous interview the company is working to refinance the original six-month bridge loan made when Wolverine took over Elite — a process slowed down by the nationwide credit crunch — but the company is other wise in good shape.
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Thread: Wolverine Fire Apparatus
05-19-2009, 10:52 AM #1
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