PanelTech Industries of Hoquiam has been sold for $2.4 million in a federal court-supervised auction to a new locally based company known as Little Green LLC, headed by Gale Dahlstrom of Hoquiam.
The sale was overseen and approved Friday by U.S. Bankruptcy Court Judge Judge Brian D. Lynch of Tacoma.
Dahlstrom also is listed as the owner of Hoquiam-based trucking company, Short Haul Inc., and has reportedly informed employees that Little Green will formally close the sale Feb. 8.
Secretary of State records show the other members of the limited liability company are Randy Rust of Grayland, as well as Kirk Dahlstrom of Craig, Alaska, and Monte Dahlstrom and Rick Rust, both of Aberdeen. The Dahlstrom brothers have been involved in the wood products business on Grays Harbor for years, including Dahlstrom Lumber in Hoquiam. The Rust brothers built up a small Westport boat building company specializing in fishing boats into Westport Shipyard, which made multi-million yachts, before selling their interest in the business.
Little Green was formed Dec. 21.
The bidding for Paneltech started Thursday at a price of $2.08 million, which was what was offered by Expanko Inc., a flooring products manufacturer with headquarters in Pennsylvania, court documents show.
Another company initially in the running was made up of current PanelTech staff and would have included reorganization and refinancing. The officers were listed as PanelTech CEO and President Roy Nott of Aberdeen, Scott Olmstead, the company’s chief financial officer, and Ronald Iff, production manager at the Stevens Way facility. They formed the corporation last June.
Olmstead as CFO also issued a court declaration in support of the auction process that said five potential bidders in all were sent due-diligence packages for the auction. One visited the plant and the other, Little Green, “visited numerous times and held interviews with management.”
PanelTech filed for Chapter 11 bankruptcy last March after it had taken a $1 million commercial line of credit from Anchor Bank back in November 2010 with an outstanding principal balance of $965,000 due in full. The company was able to make the monthly payments of $5,200 per month, but said in its bankruptcy filings that it simply couldn’t pay the loan off.
PanelTech manufactures solid surface phenolic resin paper composite products under the Paperstone, Rainstone and Stonekast brands for kitchen and bath surfaces, architectural use and other applications. It also uses resins to create products such as vehicle armor and facility blast protection.
The Chapter 11 application states that Paneltech owed more than $1.4 million to the top 20 highest unsecured creditors, including a $350,530 disputed products liability claim from Starbucks, insurance premiums, trade debt, equipment leases and stock repurchase notes.
As of March, the company employed 39 people, the filing said at the time.
The latest documents list the value of the company’s equipment at $765,600, with inventory of $598,698, accounts receivable at $530,917 and “intangibles” at $184,785.
The judge’s order approving the auction notes that the remaining workers are “employees at will.”
“As of Closing, buyer will have no obligations with respect to any unpaid salaries, wages, bonuses, severance, accrued vacation, or other compensation or benefits on account of such employees,” the agreement states.
The new ownership group also will have to negotiate a new lease with the Port of Grays Harbor, where PanelTech is located at 2999 John Stevens Way.
It adds that the new sale “is the highest and best offer for the acquired assets, (and) will provide a greater recovery for the debtor’s creditors than would be provided by any other practical available alternative.”