Noteholders Bidding to Buy Commercial Metal Forming
YOUNGSTOWN, Ohio – Commercial Metal Forming, which makes tank heads and custom stampings at its plant, 1775 Logan Ave., has entered into an asset-purchase agreement with CE Star Holdings LLC, an entity formed by a group of its parent company’s noteholders.
CMF’s parent, New Jersey-based Constellation Enterprises LLC, filed Chapter 11 bankruptcy May 16 in Delaware and proposed a voluntary restructuring of its debt obligations by selling the assets of its four industrial subsidiaries. The company also operates Jorgensen Forge Corp., a forging and machining operation in Tukwila, Wash., Zero Manufacturing, an aluminum fabricator in Utah, and Columbus Casting, a manufacturer of steel castings in Columbus.
CE Star’s purchase of Commercial Metal Forming – as well as certain assets of its other subsidiaries — is subject to court approval. The sale transaction will be subject to higher or better bids at an auction Aug. 9.
The company has notified its employees that their jobs could be eliminated once the transaction closes, although its president, Bob Messaros, said he believes most are likely to be retained.
“We strongly believe our employees are our most valuable asset, and that any buyer will want to hire most or all of our employees,” Messaros said in announcing the purchase agreement. “As we work with all potential buyers, we believe the sale process is the best way to ensure the future success of the business, and its customers, vendors and communities.”
At May 17, Constellation’s balance sheet reflected total assets of approximately $196 million and total liabilities of $238 million. Its debt consistingof $165.1 million in secured funded debt and $61.5 million of unsecured debt, including $32.5 million in pension and tax liabilities, customers’ advances and trade debt.
In addition to its plant here, Commercial Metal Forming owns and operates manufacturing plants in Saginaw, Texas, and Orange, Calif. The company employs 164.
CMF was the only Constellation subsidiary that operated profitably in 2014, states a court-filed affidavit by Timothy B. Stallkamp, managing director of Conway MacKenzie Management Series LLC, a corporate turnaround consulting company hired last September.
Copyright 2019 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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