Negotiations continue for sale of Lofthouse Brass

by Rob Learn

May 14, 2008

BURK’S FALLS – It could be a little longer until the future of Lofthouse Brass is known.

The company, with its main manufacturing plant in Burk’s Falls, is still looking for new ownership as it operates under bankruptcy protection.

Trustee of the court ordered protection Hylatt Levy of A. Farber and Partners Inc. says negotiations will take longer than the original timeline created by a judge in early April.

“It is a little longer timeline because it is an operating business and that means there are more things to consider in the negotiations,” said Levy.

The court’s timeline directed that all offers for Lofthouse be submitted by Thursday, May 8 and a preferred buyer selected by the receiver by May 12.

Levy wouldn’t give a firm date as to when negotiations would conclude and the preferred buyer be selected, but suggested one to two weeks.

Again not revealing specifics, Levy said he and his firm are negotiating “with interested parties” to complete the sale of Lofthouse Brass.

Other court specified dates included seeking court approval by May 14 and closing the sale by May 20.

Despite the passing of the timelines with negotiations continuing, it is almost business as usual at the Burk’s Falls plant.

General manager Darwin Dunn says, “We’re shipping product and the employees are working hard.”

He admits there is anxiousness amongst staff, himself included, to see a deal finalized, but morale remains relatively high.

“We feel very confident that we are going to have a positive outcome,” said Dunn.

Lofthouse Brass employs about 130 people at the Burk’s Falls plant.

The company applied for bankruptcy protection at the beginning of April following what owner Bryant Brown described as a “perfect storm” that put the company into financial difficulty.

Elements of the “perfect storm” included a low U.S. dollar, a big slow down in the U.S. housing market that Lofthouse relied heavily on and a tripling of brass and copper prices.

Lofthouse closed its only other manufacturing plant in Whitby on March 28 putting 26 people out of work without severance.

Whether the jobs remain in Burk’s Falls will depend on the new owner.

When asked if retaining the jobs in Burk’s Falls was part of the negotiations, Levy said, “Yes. But I can’t comment further. I also can’t speculate on what a purchaser may or may not do after a deal closes.”

One person soon to be out of the picture is Brown. Asked if Brown is involved in the negotiations, Levy said, “To a certain point it is out of (Brown’s) hands. While he is still the shareholder, the receiver is the one that will be making the recommendation to the court.”

The Ontario Superior Court of Justice order granting Levy’s firm receiver’s powers also grants it the ability to modify, amend or extend purchase/negotiation timelines as deemed appropriate.