N.H. loses bid to stall Isaacson sale

A federal bankruptcy court judge Thursday denied the state of New Hampshire’s objection to the sale of Isaacson Structural Steel Inc. to several auctioneers, dismissing the state’s hope that one of the low bidders might put together an offer to keep the Berlin company and plant as a going concern.If that party was really interested, it would have put more money down at the auction held at the end of last month, said U.S. Bankruptcy Court Judge J. Michael Deasy.”Money talks and B.S. walks,” Deasy said, saying oral offers are nice, but amount to no more than “tire-kicking.”Indeed “if someone out there was out there sniffing around to operate this company” that someone could buy it off the buyers.Deasy was ruling on an objection by Assistant Attorney General Peter Roth, who ostensibly was representing the state Department of Environmental Services in trying to protect the agency’s $145,000 grant, used for the purchase of high-efficiency diesel equipment at the Isaacson plant.But it was George Bald, commissioner of the Department of Recourses and Economic Development, who was the state official attending the hearing, and he was more concerned jobs than equipment.”I’m just keeping an eye on it, to see if we can keep it as a going concern, to preserve as many jobs as possible,” Bald told NHBR.Roth argued that there was such a “huge gap” between the $2.4 million bid and the $14 million appraised value of a few months ago. No matter what the intent, the whole process ended up being “done for the bank. The debtor is taking a fall on this.”Roth said that he was told by the low bidder – stalking horse GTAuctions Inc., also known as Investment Recovery Services – that it might take another week to put together a deal to keep the company alive.Isaacson’s attorney, William Gannon, agreed that there were talks between Bald and the bidder for such an outcome, but nothing came of it, and GTAuctions’ $2 million bid ended up losing by $400,000 to the bid put together by Counsel RB Capital, Myron Bowling Auctioneers and Hilco Industrial.Gannon said that he tried to forge another deal several weeks before the auction for a quarter the amount, and it couldn’t even get anyone interested at that price.”We did not begin this process with the view of liquidation” Gannon said. “We did everything humanly possible to find a going-concern buyer.”Deasy agreed. Everybody knew that Passumpsic Savings Bank of St. Johnsbury, Vt., was going to end up losing most of the $10 million to $12 million secured interest that it had in the property, so the whole purpose of bankruptcy was “to save the debtor as an operational entity, not to pay the bank. The court is satisfied that people tried to make that happen. It just didn’t happen.”Joe Foster, attorney for the buyers, said that the firms would still be willing to sell the company intact, and were not taking title to the land for just that possibility.”We are not ruling that out,” he said. “If it is at the right price.”Roth could appeal the Deasy ruling either to bankruptcy appeals court or U.S. District Court, but chances are the state will work to find someone interested in running the company, Bald said.The sale, however, has not yet been approved. There are still a number of details to be worked out, such as how some $77,000 in property taxes will be paid and other wind-down costs, such as making sure that workers pay and benefits are protected.Deasy scheduled a hearing for March 22 to resolve any outstanding issues. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW