By Robert Brauchle
Watertown Daily Times, N.Y.
WATERTOWN, N.Y. — The city of Watertown will have to wait longer for a rescue truck it ordered in January 2007 from American LaFrance. The South Carolina company voluntarily filed for Chapter 11 bankruptcy protection last week.
The city placed an order in January 2007 for an unused 2004 rescue truck chassis and a 2007 box from the company, and the equipment was expected to be delivered this month from a plant in Hamburg, Erie County.
The rescue truck will replace one the city purchased from the company in 2001 for $150,000. Malfunctions in the truck’s electrical system, transmission and body forced the city to negotiate for another truck.
The city struck a deal with American LaFrance for the second truck that now sits partially constructed in Western New York.
By filing for Chapter 11 reorganization status, the company will request $50 million in financing from lenders to get the company back on its feet, according to a company release.
City Manager Mary M. Corriveau said the city is in no danger of losing the $237,425 it paid for the rescue truck and has contacted bankruptcy lawyer Paul A. Levine of Lemery Greisler LLC, Albany, to prod the company for information.
“We’re in a lot better position than if we had just walked away from American LaFrance and sued them,” city Attorney Robert J. Slye said.
“The company will continue to operate its manufacturing facilities and provide repair services as a debtor-in-possession,” a release states.
“We expect that they are going to want to complete the truck and deliver it,” Mrs. Corriveau said. “It would be in their best interest.”
The company release says that the reorganization will take about 90 days, pushing back completion dates for its products.
“The company will file today motions to honor customer warranties and employee wages, among other relief,” the Jan. 28 release states. “The company intends to honor its obligations to supply vehicles that are supported by performance bonds.”
Calls to the company’s chief restructuring officer were not returned. It was unclear if there would be layoffs at the Hamburg plant because of the filing. The Erie County plant, along with others in Florida and Pennsylvania, experienced a “temporary holiday shutdown” in December, according to the release.
“They have it three-quarters of the way built and they have the opportunity to make some money,” Mr. Slye said. “We think the debtor in possession is going to want to finish that truck.”
The company celebrated its 175th anniversary in October.
Copyright 2008 Watertown Daily Times