Company can't pay the bills

iVillage Member
Registered: 04-02-2008
Company can't pay the bills
14
Mon, 12-08-2008 - 10:42pm

so they want the creditor, who isn't being paid to pay them?

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iVillage Member
Registered: 03-25-2007
Mon, 12-08-2008 - 11:22pm

More details, and an explanation of the Bank of America connection:


http://apnews.myway.com/article/20081209/D94UU1O08.html


Laid-off workers become symbol of mounting anger


Dec 8, 10:02 PM (ET)

By DON BABWIN


Sopal

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iVillage Member
Registered: 04-02-2008
Mon, 12-08-2008 - 11:30pm

Don't you think that is wrong?

iVillage Member
Registered: 03-25-2007
Mon, 12-08-2008 - 11:36pm
It is somewhat more complicated than that.

Sopal

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iVillage Member
Registered: 02-19-2008
Mon, 12-08-2008 - 11:42pm

Bank of America took federal bailout money. Do the people who run BOA really think there is a free lunch?

I have no sympathy for any company which takes federal bailout money then is forced to do stupid stunts for political purposes.

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Obama image
iVillage Member
Registered: 03-25-2007
Mon, 12-08-2008 - 11:56pm

BofA is being made an example of with regard to that TARP, but in checking further Republic Window and Door wasn't particularly stable:


http://www.marketwatch.com/news/story/Statement-Republic-Windows-Doors/story.aspx?guid={ADF76E34-99F2-4C4A-A977-C8FB05EEAABA}





PRESS RELEASE

Statement from Republic Windows & Doors

Dec. 8, 2008









CHICAGO, Dec 08, 2008 (BUSINESS WIRE) -- The management of Republic Windows & Doors today announced the following chronology of the company's discussions with its lender Bank of America."
10/16/08 a- Republic presents plan for "orderly" wind down including ceasing
manufacturing in January 2009. INFORMS BANK OF AMERICA OF POSSIBLE
WARN ACT NOTICE ISSUES AND VACATION PAY.
10/15/08 a- Informed Bank of America that Republic had a 10/24/08R buyer for
the existing Note for ±$3.0M, discount of $1.5M.
10/15/08 a- Offer rejected by Bank of America stating they believed they were
"over" collateralized.
10/15/08 a- Bank of America demands plans for "orderly" wind down Republic.
10/18/08 a- Bank of America rejects plan and demands a shorter wind down
period.
10/27/08 a- Republic responds with a new plan to cease operations January 2009.
10/29/08 a- Bank of America rejects plan.
11/25/08 a- Republic requests permission from Bank of America to issue
vacation pay to all employees.
11/26/08 a- Bank rejects Company request to make vacation pay.


Conditions Precedent to "Current"
02/2007 -
07/2008 a- Republic obtains equity infusion from a capital fund which over
time ultimately grows to ±$11,000,000. This capital is used to
retire existing secured debt of ±$8,000,000 and other senior lenders
as well as finance ongoing operations and cash "burn".

02/2007 a- New secured debt is obtained from Bank of America.
a- Sales Remodeling New Construction Total
(in millions $)
2008 34.0 6.3 40.3
2007 34.4 17.9 52.3
2006 31.8 26.1 57.9
2005 38.9 29.5 68.4
2004 48.0 22.3 70.3
2003 45.1 22.6 67.7
a- No one could have predicted the unprecedented drop in new
construction sales due to the unprecedented economic conditions.


History
1998 a- Republic moves to new headquarters on Goose Island.
2002 a- Company reports first loss in history.
a- Loss history
2008/Q3 $5.7mm
2007 $5.5 mm
2006 $7.2 mm
Results from Previous Management Team
2005 $21.1 mm
2004 $5.7 mm
2003 $3.7 mm
2006-07 a- Richard Gillman, previously a minority shareholder buys out all
other partners assumes all debt obligations and adds ±$2,200,000 of
his personal funds to add capital to the business; installs new COO
from outside of the company.
2006-07 a- Fixed expenses are reduced $18.9 mm, or 47%.
02/2007 a- Productivity increased ± 30%.
02/2007 a- Gillman secures new capital.
11/2008 a- Gillman family forms Echo Windows, LLC.


Despite inheriting a company bloated with overhead and lacking any type of manufacturing discipline and/or productivity, the company makes significant improvements only to encounter and unprecedented decline in new home construction, which led to a decline of company sales to new construction of 80%. This placed the company in the impossible position of not having the ability to further reduce fixed costs, coupled with severe constrictions in the capital debt markets and an unwillingness of the current debt holder to continue funding the operations."

Sopal

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iVillage Member
Registered: 11-19-2008
Tue, 12-09-2008 - 1:03am
That's how the "economic crisis" got started in the first place.
iVillage Member
Registered: 11-20-2008
Tue, 12-09-2008 - 9:51am
I am surprised at the right wingers on here, since the "rule of law" is one of their main mantra.
iVillage Member
Registered: 02-19-2008
Tue, 12-09-2008 - 11:32am

I agree with you. People should be paid their entitled benefits. Unless the employer files for bankruptcy, which doesn't appear to be the case.

Under bankruptcy a federal judge would probably decide what to do and the employees could file claims with the bankruptcy court.

Every employee should receive the benefit they are entitled to by law.

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Obama image
iVillage Member
Registered: 03-25-2007
Tue, 12-09-2008 - 4:00pm

Update:


Workers who staged sit-in at Chicago plant win
Bank will give loans to employer so they can cover severance, vacation pay
updated 21 minutes ago


CHICAGO - Bank of America says it will extend credit to a Chicago window and door maker whose workers have occupied the factory for five days.


The bank said Tuesday that it's willing to give the Republic Windows and Doors factory "a limited amount of additional loans." That's so it can resolve claims of employees who have staged a sit-in since Friday.


The factory closed Friday after Bank of America canceled its financing.


Workers were given three days' notice. But they refused to leave and vowed to stay there until receiving assurances they would receive severance and accrued vacation pay.


The bank has been criticized for cutting off the plant's credit after taking federal bailout money.>>>

Sopal


Sopal

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iVillage Member
Registered: 04-02-2008
Tue, 12-09-2008 - 9:08pm

My point though, if the company cannot pay their bills and Sopall made a great post, why should BOA pay the workers wages?

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