The parent company of an Arnold sandbag manufacturer that held government contracts moved to start selling itself off Friday.
All American Bag & Packaging has been closed since Nov. 16, when its parent company, Total Industrial & Packaging, of McKees Rocks, filed for Chapter 11 bankruptcy.
Both companies lost contracts with the Navy.
In February, the vice president and general manager of Total Industrial pleaded guilty to participating in a conspiracy to fix prices for Navy contract bids with competitors.
All American employed about 140 at its plant in Schreiber Industrial Park, although it announced plans in 2005 to hire about 400 when it moved into the facility. Employees said the company was plagued by high turnover, although the jobs generally paid more than $7 per hour.
"There is no money at all to pay anything," said Carlota Bohm, trustee for the company who was appointed in February. "I would ask for more time, but I don't think that time will yield anything."
Schreiber Industrial Park failed in U.S. Bankruptcy Court's Western District of Pennsylvania to prioritize itself in the line of creditors to receive money from the liquidation. All American owes $40,000 for three months rent of the 52,000-square-foot building.
"We're probably not going to see that $40,000," said Celine Kramer, attorney for Schreiber Industrial Park.
In addition to its landlords, Total Industrial's creditors include utility companies, office suppliers, attorneys, the U.S. government and banks, including First National Bank, which financed the company's equipment purchases.
Total Industrial and All American still has production equipment, as well as furniture and what Bohm called nominal inventory. Before Total Industrial's closure, the company's Web site advertised 3 million available sandbags. Bohm said that during the course of its lease in the Schreiber building, All American invested about $100,000 in electrical improvements to the facility.
Bohm said there was a chance the company could recover some money from a tax refund and lawsuits, although she would not say exactly how much money the company expected. Total Industrial also is due about $13,000 from a government contract it completed.
In the price fixing case, the guilty pleas will mean $10,000 fines for both men and up to six months in jail.
Attorney Richard Sandow, of Jones, Gregg, Creehan and Gerace in Pittsburgh, who represents Total Industrial & Packaging, said the government was satisfied with the company's cooperation and that no charges would be filed against Total Industrial.
The U.S. Justice Department asserts the executives, Vice President Tom Cunningham and General Manager Rich Barko, attended meetings between August 2003 and January 2004 where Navy contract competitors discussed price fixing and noncompetitive bids regarding the sale of equipment used to transport bombs and other munitions.
