GLENSHAW GLASS CASE SHIFTS TO CHAPTER 11
Published: Tuesday, March 15, 2005
By Jim McKay
Pittsburgh Post-Gazette
A federal judge decided yesterday that Glenshaw Glass Co. must liquidate its assets under the jurisdiction of a less stringent Chapter 11 bankruptcy rather than a state-court appointed receivership.
The change in jurisdiction, sought by a group of unsecured creditors, was approved by U.S. Bankruptcy Judge M. Bruce McCullough during a brief hearing.
Margaret Good of The Meridian Group, appointed trustee in November by Common Pleas Judge Robert P. Horgos, will continue as principal operating officer under Chapter 11 proceedings. Chapter 11 gives creditors who are owed money more say over how assets are disposed than does a receivership.
PNC Financial Services Group had sought the trusteeship and liquidation last fall after the glass maker defaulted on a mortgage valued at $11.5 million, and other creditors have complained that their interests were not being adequately addressed.
While she had opposed the shift to Chapter 11, Good said the change in jurisdiction would have little impact on her work in liquidating the assets of the century-old company.
The Meridian Group already has sold much of the company's inventory of glass products to pay down PNC’s debt.
No buyers have yet made an acceptable offer for the idled plant and production equipment, but Good said there are still a few interested parties looking at the facility.
Glenshaw Glass closed last November, idling about 300 employees, after Good was unable to quickly find a buyer following the court-ordered ouster of former owner John Ghaznavi.
The facility suffered substantial damage in September flooding and is one of several glass plants in this region to be hurt by rising costs of energy and other market factors. Anchor Glass Container closed a plant in South Connellsville last year, idling about 340 employees. And Anchor Hocking Corp. announced that it was reducing its 500-employee work force at a glass plant in Monaca by about half.
David K. Rudov, an attorney representing unsecured creditors who had filed a petition last month to convert the case to a Chapter 7 liquidation, said yesterday that Chapter 11 would give Good more flexibility in dealing with potential buyers.
Rudov maintained that receivership was not the best forum for his clients -- three vendors who together are owed more than $1 million.
Ghaznavi, the former owner, was in the courtroom yesterday but declined comment except to say he hoped the proceedings would provide the best outcome possible to all interested parties.
jmckay@post-gazette.com
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