Judge: Harper Brush has 120 days to be sold

A U.S. bankruptcy court judge has given Harper Brush Works officials 4.5 months to find a buyer, Tracy Vance, executive director of Fairfield Economic and Development Association said today.

The 112-year-old broom and brush manufacturing company filed for Chapter 11 bankruptcy in May. Attorneys presented two motions in U.S. Bankruptcy Court July 12-13. The first was a cash collateral motion. The second was a debtor-in-possession financing motion.

The Honorable Judge Anita L. Shodeen indicated last week she would deliver her rulings Friday; however, the rulings came in late Wednesday, Vance said. Shodeen ruled favorably on the cash collateral motion, granting it through Dec. 14. She denied the debtor-in-possession financing motion.

The cash collateral motion will allow Harper Brush to use cash generated from sales to continue running the company. Prior to the judge?s ruling, there was a lien on those funds, and they could not be used.

?This will allow the company to operate on a cash collateral basis, meaning they can spend money on production as it comes in,? Vance said.

A favorable ruling on the debtor-in-possession financing ruling would have allowed Harper Brush to secure additional loan financing. Richard Lauter, attorney for the official committee of unsecured creditors appointed by the court in the Harper Brush bankruptcy case, said earlier in July he believed a negative ruling on the debtor-in-possession motion would leave Harper Brush Works officials no choice but to lock their doors. However, Vance said today he does not believe that will be the case. The company has prepared a budget that will allow them to remain operational through the time of a sale, Vance said.

?If she had ruled no on both motions, the company would not have been able to operate because the company would not have had any money,? he said. ?But now they have a budget, and it will be enough to carry them.?

Vance testified at the hearing about the importance of Harper Brush Works to the Fairfield community. Shodeen indicated in her ruling she based her decision largely on the impact closing Harper Brush Works would have on the city and surrounding communities.

Harper Brush provides employment to 70 people. One hundred thirty seven companies currently provide supplies or services to Harper Brush. Forty-three of those companies are in Fairfield or Jefferson County.

Vance said with the rulings in hand, full attention will be shifted to locating a buyer for the company so it can continue its 112-year-old legacy in the Fairfield business community.

?This ruling is the best case scenario that we could hope for at this point,? Vance said. ?This allows the company and us, locally, to search for a potential buyer.?

FEDA and city officials are working with company officials to try to find a buyer, a process Lauter estimated would take 120 days.

?It?s going to take every bit of that,? said Vance.