‘Stalking horse’ emerges in Isaacson bankruptcy
Isaacson Structural Steel Inc. has a “stalking horse” that it’s hoped can lead it out of bankruptcy with most of the firm’s production and construction jobs intact, according to Bill Gannon, attorney for the Berlin-based company.While Isaacson has talked to other interested parties, one company has made an oral offer for the operating license and the right to lease the property from the city, according to Monday’s filing in U.S. Bankruptcy Court in Manchester.In the filing, the court was asked to support an exclusive agreement with a stalking horse to set the floor for a Feb. 22 auction. Bidders would have to beat that price with 120 percent of a break-up fee.The filing implies that there could be more than one stalking horse, and Gannon said he was obligated to talk to other bidders until a firm offer is made.But Gannon said he was particularly interested in this company as a stalking horse because it knows the fabrication metal business and would continue the plant as a going concern, keeping most of the manufacturing staff, although there could be some loss of administrative personnel.About 110 people are employed in the structural steel part of the business now, according to Jack Donovan of the state Business Finance Authority.”Our primary goal is to continue the jobs, the welfare of the employees,” Donovan said, adding that has been the goal of many parties involved, including Gov. John Lynch.Although Gannon would not release the name of the stalking horse, several parties involved with the bankruptcy said it was Heico Companies LLC, a company based near Chicago.CEO Arnie Hanson reportedly told the Berlin Reporter last week that Heico was a very interested buyer in the company who decided to hold off making an offer until an environmental assessment and study could be completed on the property.But Hanson reportedly said that the report showed it was clean. NHBR could not reach Hanson by deadline.Donovan said there was another serious bidder in the same industry from the local area, but he too preferred Heico’s possible bid, because a local company would be more likely to consolidate jobs, as opposed to outside company “wishing to make it its flagship.”Monday’s stalking horse filing does mention Heico, but it’s about a recent biomass contract involving an arrangement with Heico and its affiliate Zalk Joseph, a metal fabrication company in Wisconsin, a company that is very similar to Isaacson, according to Donovan.Heico declined comment. Zalk Joseph executives could not be reached by NHBR deadline.Heico — not to be confused the publicly held Heico Aerospace down in Florida — is a privately held holding company with over 35 businesses that generates $2 billion in revenues in four “platforms”: Ancra Group, , and Pettibone L.L.C., Heico Metal Processing Group and Heico Construction Group, according to the company website. Zalk Joseph is part of the construction group.While most of the companies are involved in manufacturing and construction, the company also owns the majority share in the NBA’s Memphis Grizzlies.The company is well known “as an investor in distressed situations and continues to have interest in those opportunities,” according to Heico’s website.”Each of our businesses runs on a stand-alone basis. While they have great independence, our companies also benefit from the opportunity to share knowledge about markets, production processes and management practices with any of our other companies,” according to the website. “This cooperative structure gives our employees a wealth of information and resources that empowers them to take their businesses to new heights.”A hearing on Tuesday was held to complete various details of Sugar Hill-based Presby Environmental’s purchase of Isaacson Steel’s warehouse, which employs 20 to 30 people. The smaller company mainly sells steel to construction companies, as opposed to Isaacson Structural Steel, which is primarily a construction company.Presby Environmental, a firm that offers onsite wastewater septic treatment servies, was started by David Presby, an inventor and entrepreneur. Presby’s father also started Presby Construction, a general contractor that builds steel buildings and has other construction and side businesses.The sale would not include debts, receivables and $100,000 cash. Presby said it plans to keep the employees on the payroll.At the Tuesday hearing, Gannon reported that Presby has upped its bid to $250,000 and the objection of various parties, particularly the city of Berlin and the Business Finance Authority, were tentatively settled.But there was some tension in the hallway afterward, when David Presby himself demanded a closing then and there. The deal was finalized in Gannon’s office Tuesday afternoon, subject to bankruptcy court approval. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW