Presto Lifts Inc has been forced into bankruptcy and sold after a surprise attack by its creditors.
The new owner, Southworth International, paid USD4 million for the company.
According to financial statements obtained by Forkliftaction.com, three unnamed creditors filed an involuntary bankruptcy petition under Chapter 7 of the US Bankruptcy Code in the United States Bankruptcy Court for the District of Rhode Island on March 28, halting negotiations already underway between TBM Holdings Inc (Presto's parent), Presto, and Bank One.
On March 29, Presto applied for and was granted a modification of the bankruptcy petition from a Chapter 7 to a Chapter 11 filing, allowing the sale to Southworth International to go ahead on April 1.
Presto and TBM had been negotiating with Bank One over a proposed foreclosure on "substantially all the assets of Presto" which were collateral for debts owed by sister company Long Reach Inc. The negotiations were suspended after the bankruptcy filing. No details of Long Reach's Bank One debts were revealed.
Presto had shut workers out of its Pawtucket manufacturing plant late last month, two weeks after telling them the company was for sale and there could be layoffs.
The Providence Journal reported that TBM said sales at Presto and Long Reach had fallen because of a 39 per cent drop in forklift orders in 2001.
Neither TBM president William Schwartz nor vice president William Sample could be contacted before deadline.
Presto's annual sales in 1999, the latest figure available, were USD17 million.