Specialty Filaments declares bankruptcy
January 15, 2007
By JOHN FLOWERS and JOHN McCRIGHT
MIDDLEBURY — Specialty Filaments Inc. formally announced on Thursday that it will be filing for bankruptcy under Chapter 7, thereby sending the company’s 175 workers into the market in search for new jobs.
“The board of directors and senior management of Specialty Filaments Inc. were in discussions over the weekend and the last few business days with the company’s senior lender (Wells Fargo) regarding the lender’s demand that the company turn over its assets pursuant to its secured loan agreements with the lender,” reads a Jan. 11 press release from Specialty Filaments spokesman Bill Haynes. “In light of the bank’s actions, and after reviewing all of the alternatives, the company determined that a filing of a Chapter 7 bankruptcy petition is in the best interests of the company and its various constituents. We regret this action and appreciate the hard work and support the employees and community have historically given to the company.”
Specialty Filaments has been one of the world’s largest makers of synthetic bristles used in all kinds of brushes. The company has faced increasing competition from other nations that can produce the bristles more cheaply.
A court-appointed trustee will now manage the liquidation of the company. Specialty Filaments’ facilities at 3046 Case St. and 183 Industrial Ave. in Middlebury; and at 125 College Street in Burlington, were permanently closed and all employees have been terminated (effective Jan. 5), according to Haynes.
While some company officials cited a slim chance that Specialty Filaments could be sold to another entity through the liquidation process, most workers were ready to immerse themselves into the hunt for new jobs.
“Specialty Filaments is closed; it’s done,” said Barry Whitney, president of the company workers’ union. “We’re all out of work.”
Whitney is among the many Specialty Filaments workers who were invited to attend a special job fair scheduled for Thursday, Jan. 18, from 9 a.m. to 3 p.m., at the Middlebury American Legion headquarters on Boardman Street.
“I have already received multiple calls from employers with jobs to fill,” said Jamie Stewart, executive director of the Addison County Economic Development Corp. (ACDEC). “We will make sure people’s skills are matched with businesses that need those skills.”
Stewart noted that the general public was also invited to the job fair.
Vermont Department of Labor officials are expected to be in town next week to help the former Specialty Filaments employees complete the necessary paperwork to tap into unemployment benefits and job pools.
Laid-off workers can also file their initial unemployment claim by calling, toll free, 1-877-214-3330, or visiting the Department of Labor’s Middlebury office, located in Addison County Community Action Group’s “Community Services Building” at 282 Boardman St.
Whitney said he and his colleagues continue to look for answers on what, if any, health insurance and severance compensation to which they may be entitled.
Company management “believes that pension benefits will be unaffected by this (bankruptcy) filing, although the responsibility for payment will transfer to the Pension Benefit Guaranty Corporation (PBGC). a governmental agency,” according to Haynes.
“The way they’ve done pretty much everything was not the best,” Whitney said of company management’s handling of the closing.
Whitney added that managers have discouraged the union from taking steps that might scare off a potential buyer. One such step might be declaring the union a creditor in the bankruptcy proceedings as a means of recouping back pay.
“They said, ‘Think about what you’re doing because it could it could impact the sale (to a prospective buyer),’” Whitney said.
“We’ll make a decision based on what’s best for the people who worked there.”
Union representatives discussed the possibility of an employee-led buyout with officials from the state and the ACEDC, who were not optimistic that such a sale would happen.
“They said that was possible but it is a lengthy process,” Whitney said. “Wells Fargo, the lender, is calling the shots now and they don’t want to wait around.”
Whitney is sizing up his own options now that he’s lost the only job he’s held as an adult.
“It’s the only thing I’ve ever done,” he said. “I graduated (from Middlebury Union High School) in 1996 and went to work there at 18.
“I’ll look out for the other employees to make sure they get what they can,” he added. “My top priority now is my family … I’ll go to the job fair and see what they have.”