Paul Larochelle, Prime’s president, told the local paper, Bangor Daily News on November 17 that the process will allow the company to increase production volumes while maintaining its work force of 178.
‘We have a very strong work backlog here,’ said Larochelle. ‘All efforts are being put into moving forward. Most of our employees have been through this with us before and I expect nothing but great teamwork and support. The restructuring will allow Prime to emerge as a lean and profitable standalone company’, he told the Bangor Daily News.
According to a press release issued by Prime Tanning on November 17, most of the company’s financial troubles stem from closure and litigation expenses associated with its former facilities in Berwick and Missouri. In 2007, the former Irving Tanning company merged with two other companies and over a course of years consolidated all of its operations in Hartland.
The past debts, along with outstanding litigation, have made it difficult for Prime to finance its operations. As part of its reorganisation, Prime has reached agreements with the Maine Rural Development Authority and a firm called Porter Capital to provide financing through the Chapter 11 procedure. That means the Hartland plant will remain open.
Prime Missouri, suffering from financial losses, sold its assets to National Beef Leathers in March 2009, according to the press release. Several lawsuits were filed against Prime Missouri for alleged injuries caused by Prime’s use of toxic chemicals. Though Prime Missouri have always denied the allegations, the legal fight has been expensive and has tied up some $1.5 million that otherwise would be paid to creditors.
It is believe that Prime will now be restructured or may be put up for sale to interested parties. Today, the company has annual sales of approximately $30 million.
The company’s bankrupt filing lists 16 creditors owed between $100,000 and $1.1 million with five firms owed more than $500,000. Prime have listed their total liabilities as being between $1 million and $10 million.
