Potential buyer for Rockford Products pulls out
A much-anticipated buyer for the bankrupt Rockford Products Corp. has backed out of negotiations, forcing the company to seek an extension of its multimillion dollar line of credit.
“They never made an offer,” said Mike Silverman, a consultant to Rockford Products during the bankruptcy. “They indicated interest. They indicated they were going to make an offer, but they never did.”
Company officials had hoped to close a deal for the Cold Formed Products Division by October, but instead will seek another buyer for the company’s largest operation.
The potential buyer was MacLean-Fogg Co., a Mundelein-based fastener company that also makes automotive parts.
Because negotiations fell through, Rockford Products is now working toward a new agreement with its secured creditor for financing until the end of January, Silverman said. A $21 million line of credit from Bridge Finance Group is keeping the company afloat during bankruptcy proceedings and is set to expire in mid-October.
Last month, Rockford Products announced a deal to sell its smaller retail line of third-party-made fasteners to an affiliate of Dorman Products for more than $3 million.
The new owner, RB Distribution, intends to eventually move the operation out of Rockford. Sixty Rockford Products employees will be affected.
Rockford Products employs 515 workers, most of them at its main plant at 707 Harrison Ave. The company makes ball studs and other parts for the automotive industry.
The company filed Chapter 11 bankruptcy July 25.
Besides the money it owes to Bridge Finance, Rockford Products has a $5.5 million pension fund liability and more than $11 million outstanding to its top 20 unsecured creditors. More than 900 creditors are owed undisclosed amounts of money.
Staff writer Nate Legue may be reached at 815-987-1346 or firstname.lastname@example.org.