Posted at: 04/15/2013 6:47 PM
By: Dan Conradt
APC Files Receivership, Seeks Financial Help
(ABC 6 NEWS) -- It began with word late last month that Austin Packaging Company was laying off 125 employees. Now, the next chapter of the APC story will be written in court.
The company has filed documents, asking for court permission to enter into receivership.
"The basic difference is that bankruptcy is a federal proceeding in a federal court and receivership is a state court procedure," said Austin attorney Bill Bodensteiner.
We asked him to look at the court documents and interpret them for us.
“It appears from these papers that there is one owner and whoever that owner is would lose all control of the business and control of the business would vest in the court appointed receiver," he explained.
Citing a sharp downturn in customer demand, the court documents cite an unsecured debt of more than $6.7 million dollars, and a secured debt of about $1.7 million to a local bank.
"I would suspect there would not be enough assets to pay the secured creditor, and in that case the unsecured creditor would receive nothing," attorney Bill Bodensteiner explained.
APC later revised the number of laid-off workers from 125 to about 80.
"I suspect the reason for the receiver would be to keep the business going and to keep the business to the extent that it is now in Austin, at a smaller scale," Bodensteiner told us.
“It's my understanding that the receiver has some experience in this area, and he has a potential buyer in the wings."
Our phone calls to Austin Packaging executives for comment were not returned. A hearing on the receivership request is scheduled for Tuesday afternoon