LEAVITTSBURG, Ohio (March 17, 2010)—Denman Tire L.L.C. has filed for Chapter 7 bankruptcy and will liquidate the company, putting about 260 employees out of work.
Sanford Pensler, Denman Tire CEO and president of Pensler Capital Powder Corp., majority owner of Denman, filed an action waiving notification of a meeting of officers of Denman over the issue and, as managing member of the company, began Chapter 7 proceedings. Pensler hired the law firm Friedman & Rummel Co. L.P.A. in Youngstown, Ohio, to represent the company in the Chapter 7 case, which was filed with the U.S. Bankruptcy Court, Northern District of Ohio.
A Denman officer sent an e-mail to the press todaythat he has “just been informed that Denman has filed a Chapter 7 liquidation this morning. I have no more information than that, except that there is nobody working at the plant, office or warehouse at all.”
Leavittsburg-based Denman has struggled for more than a year to refinance its debts or secure a buyer, but to no avail. In early March, the 91-year-old tire maker said it had issued notification to employees and other affected parties of a tentative closing of its operations in accordance a federal law, the Worker Adjustment and Retraining Notification Act (WARN). At that time it did not give a deadline for finding a buyer or financing but confirmed that, under WARN, the operation could close as early as mid April.
The permanent shutdown means Denman's construction, agriculture and mining tire factory in Leavittsburg and its warehouse in Austintown, Ohio, are closed.
In its Chapter 7 filing, Denman listed the following equity security holders:
* Pensler Capital, Princeton, N.J.—76.5 percent;
* Interco Investment Group L.L.C., Rayne, La.—20 percent;
* Gary Hudson, Celina, Ohio—1.04 percent;
* Charles R. Wright, former Denman president and CEO, Hendersonville, Tenn.—1 percent;
* Scott Tackett, Cortland, Ohio—0.93 percent; and
* Joseph Fallon, Marlton, N.J.—0.5 percent.
Denman, which marked its 90th anniversary in 2009, reported in April 2009 it had substantial losses from October 2008 through February 2009. The company unsuccessfully sought a $3 million loan or more federal government contracts to remain afloat last year and survive the ongoing recession.
The company, which was acquired in 1996 by Pensler Capital, had estimated sales of $75 million in fiscal 2008. It produced more than 1,000 different sizes and types of tires, with its Leavittsburg plant having a capacity of more than 2,400 units per day.