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 â€œmay be subject to setoff or refund,â€ 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)