MONTICELLO - Real estate and equipment of a clothes hanger manufacturer in Monticello went back to the bank - lock, stock and barrel - with barely a bid at two sales Thursday.
Shanti Industries closed the doors on its hanger manufacturing facility Jan. 21, following a bankruptcy and foreclosure. Shanti's bankruptcy papers, filed in U. S. Bankruptcy Court in Central District of California in January 2010, listed more than $1 million in debts and less than $50,000 in assets.
At the foreclosure sale at the Green County Justice Center Thursday, an attorney for Celtic Bank started the bidding for the building and 6.7 acres of land, assessed at $738,000, at $150,000. One local bidder went up to $255,000 before dropping out, when Celtic bid $275,000. The man said he had to take into consideration $130,000 in back taxes and other costs that came with the property deal. Celtic was prepared to bid $500,000.
Less than two hours later at the factory building on N. Pratt Road in Monticello, the factory equipment, used as collateral for the business, went up on the auction block as one lot. Auctioneer Joe Mellem, Monticello, said he was instructed to start the bidding at $150,000. He also had a reserve bid price that he did not release.
Inside the factory, without electricity to turn on a light, about a dozen past employees of the plant and local residents lined the doors of the loading docks to watch, as two out-of-state bidders uttered not a word.
David Heath of Heath Industrial Auction Services, Inc., Barrington, Ill., was looking for a liquidation buy.
Milton Magnus of the family-owned hanger manufacturer, M& B Hangers, Birmingham, Ala., said he would meet the bid of $150,000, but no more.
"It's not worth it," he said after the sale. "It's old technology."
Magnus said his company was interested in purchasing the equipment to boost production in one of its factories, until its new equipment is installed.
"It's very difficult to make hangers in the United States," he said, "but we have great people and we know what it costs to make a hanger."
Magnus said U.S. tariffs placed on China-imported hangers have caused the product to be redirected to Vietnam, which is not under a tariff and is now exporting hangers to the U.S.
With the property and equipment still under one owner, the Celtic Bank Corporation, past employees are hoping a side deal is in the making. If the equipment is removed from the building, the employees say making hangers will never happen again in Green County.
Tom Marty, a plant manager, worked at the factory for 34 years and attended both sales Thursday.
"No surprises," he said after the auction. "The price is too high, and there's no market."
Marty said some individual pieces of the equipment could have been sold for use at other factories.
He believes the price was "preset" and selling the equipment as one lot was done for a reason.
"The average Joe is not going to come in here and buy hanger equipment," he said.
Shanti Industries closed the doors on its hanger manufacturing facility Jan. 21, following a bankruptcy and foreclosure. Shanti's bankruptcy papers, filed in U. S. Bankruptcy Court in Central District of California in January 2010, listed more than $1 million in debts and less than $50,000 in assets.
At the foreclosure sale at the Green County Justice Center Thursday, an attorney for Celtic Bank started the bidding for the building and 6.7 acres of land, assessed at $738,000, at $150,000. One local bidder went up to $255,000 before dropping out, when Celtic bid $275,000. The man said he had to take into consideration $130,000 in back taxes and other costs that came with the property deal. Celtic was prepared to bid $500,000.
Less than two hours later at the factory building on N. Pratt Road in Monticello, the factory equipment, used as collateral for the business, went up on the auction block as one lot. Auctioneer Joe Mellem, Monticello, said he was instructed to start the bidding at $150,000. He also had a reserve bid price that he did not release.
Inside the factory, without electricity to turn on a light, about a dozen past employees of the plant and local residents lined the doors of the loading docks to watch, as two out-of-state bidders uttered not a word.
David Heath of Heath Industrial Auction Services, Inc., Barrington, Ill., was looking for a liquidation buy.
Milton Magnus of the family-owned hanger manufacturer, M& B Hangers, Birmingham, Ala., said he would meet the bid of $150,000, but no more.
"It's not worth it," he said after the sale. "It's old technology."
Magnus said his company was interested in purchasing the equipment to boost production in one of its factories, until its new equipment is installed.
"It's very difficult to make hangers in the United States," he said, "but we have great people and we know what it costs to make a hanger."
Magnus said U.S. tariffs placed on China-imported hangers have caused the product to be redirected to Vietnam, which is not under a tariff and is now exporting hangers to the U.S.
With the property and equipment still under one owner, the Celtic Bank Corporation, past employees are hoping a side deal is in the making. If the equipment is removed from the building, the employees say making hangers will never happen again in Green County.
Tom Marty, a plant manager, worked at the factory for 34 years and attended both sales Thursday.
"No surprises," he said after the auction. "The price is too high, and there's no market."
Marty said some individual pieces of the equipment could have been sold for use at other factories.
He believes the price was "preset" and selling the equipment as one lot was done for a reason.
"The average Joe is not going to come in here and buy hanger equipment," he said.