YOUNGSTOWN, Ohio (April 7, 2010)—A bankruptcy court judge has ruled Alliance Tire USA may retrieve tire molds and ancillary equipment for Galaxy-brand tires that Denman Tire L.L.C. has been making under contract with Alliance.
The motion in the Chapter 7 bankruptcy liquidation calls for Alliance—which bought assets related to the Galaxy brand in December at a bankruptcy court auction for GPX International Tire Inc.—to pay Denman's trustee $129,104 plus deposit $38,857 in escrow for the molds. The escrow amount “may be subject to setoff or refund,” pending further order of the court.
Alliance also is allowed to purchase, at cost, all Galaxy-related inventory.
Denman had been producing Galaxy-brand tires for GPX since 2000, according to court documents. The molds are for at least three Galaxy-brand specialty tire products, including the Super Trencher, Turf Special and Super Soft lines.
Alliance called the products key original-equipment-type tires and said in court documents Denman's bankruptcy has caused it to lose sales of about $250,000. Alliance intends to transfer the molds to another, unidentified plant to avoid supply disruption, according to Manny Cicero, president of Alliance Tire USA.