Alliance to retrieve Galaxy moulds from Denman

ERJ staff report (TB)

Youngstown, Ohio -- The judge in Denman Tire LLC's Chapter 7 bankruptcy liquidation proceedings has approved a motion that will allow Alliance Tire USA to retrieve tyre moulds and ancillary equipment for certain Galaxy-brand products that Denman had been producing under contract for Alliance.

The motion calls for Alliance-which bought assets related to the Galaxy brand in December at a bankruptcy court auction for GPX International Tire Inc.-to pay Denman's trustee $129,104 plus deposit $38,857 in escrow for the moulds. The escrow amount “may be subject to setoff or refund,” pending further order of the court.

The motion also provides for Alliance to purchase, at cost, all Galaxy-related inventory.

Denman had been producing Galaxy-brand tyres for GPX since 2000, according to court documents. The moulds in question are for at least three Galaxy-brand specialty tyre products, including the Super Trencher, Turf Special and Super Soft lines, according to the court documents.

Alliance called the products key OE-type tyres and said in court documents Denman's bankruptcy has caused it lost sales of about $250,000. Alliance intends to transfer the moulds to another, unidentified plant to avoid supply disruption, according to Manny Cicero, president of Alliance Tire USA.

From Tire Business (A Crain publication)