SHARPSVILLE, PA. Creditor contests share of SQP sale



The issue will be back before a federal bankruptcy judge Wednesday.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARPSVILLE, Pa. -- The dispersal of funds from the sale of bankrupt Sharpsville Quality Products will take more time to work out.
The creditors and the company were in U.S. Bankruptcy Court in Erie on Thursday with a budget showing how the money should be divided among the secured creditors, but the company and one of those creditors were in disagreement.
J.J. Ritchie of Chicago, the largest creditor, put $1.25 million into the employee-controlled company, and he wants more than the company says he should get.
SQP says Ritchie should get only $125,000, which is the scrap value of large metal flasks used by the foundry to make iron molds for the steel industry. Ritchie has a first-position lien only on those flasks.
However, Ritchie's attorney presented a letter in court Thursday that said a potential buyer will pay $250,000 for the flasks and that he should get a larger share of the $907,685 left over after property taxes were paid out of the $1.05 million sale price.
Agreement: John Holliday, executive director of the Shenango Valley Industrial Development Corp., has been working with the creditors to come up with an acceptable disbursement of the funds and said the creditors had agreed to let Ritchie claim about $220,000 of the sale proceeds.
It was SQP that objected, saying Ritchie should get only the $125,000 and that the remaining $95,000 should go to administrative costs of the bankruptcy, Holliday said.
U.S. Bankruptcy Judge Warren Bentz set a hearing for 10 a.m. Wednesday in Erie to resolve the issue, Holliday said.
The judge declined to approve the distribution of the undisputed portion of the $907,685, Holliday said.
Creditors: The other creditors and the amounts they could receive are: Shenango Valley Enterprise Zone, about $153,000; the Pennsylvania Machinery and Equipment Loan Fund, $106,000; Pennsylvania Industrial Development Authority, $282,000; Penn-Northwest Development Corp., $38,000: A New Beginning Inc., $54,000; and the borough of Sharpsville, $54,000.
SQP has been sold to Hempfield Partners Inc., a Pittsburgh-based company with holdings in the steel and foundry industry.
The company plans to restart the foundry with about 30 workers. It had 75 when it was forced to shut down in December.

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