Southworth Sells Agawam Facility for $1.9 Million
Agawa, Massachusetts, USA 11 January 2018 -- (From news reports) -- Bankrupt Southworth Paper Co. is selling its Agawam facility for $1.88 million to investors from Adams. The city of Agawam has first claim on $140,000 it's owed by Southworth.
Papers filed this week in U.S. Bankruptcy Court in Springfield detail the sale. Southworth needed court permission to transfer its assets after filing in September for federal bankruptcy protection.
Southworth abruptly shut down its operations in August 2017, saying it could no longer get financing. The company, in business for 178 years, had 120 employees in Agawam, the Turners Falls section of Montague, and Seattle.
Southworth once boasted that President Abraham Lincoln used its paper to accept Stephen Douglas' invitation to debate.
The Bankruptcy Court has already approved the sale of Southworth's former paper mill in Turners Falls for $4 million, said attorney Joseph B. Collins of Hendel & Collins in Springfield. He represents Southworth in its bankruptcy.
According to papers in Bankruptcy Court, Southworth sold the Turners Falls mill, 36 Canal St., in 2017 to SBD Greentech, a Maine corporation with offices in New York City. Included in the sale are the mill's equipment, remaining stock and its Federal Energy Regulatory Commission (FERC) license to create hydro power from the Turners Falls Canal.
The buyers in Agawam, PCT Realty Ventures LLC, are not buying Southworth's leftover equipment there, Collins said.
On Wednesday, Southworth asked for court permission to sell two die cutters used to cut paper to Mohawk Fine Papers of Cohoes, New York, for $150,000. Mohawk has an envelope factory in South Hadley.
At the end of its life, Southworth had the mill in Turners Falls, where it made paper, and the warehouse and converting facility in Agawam, where it took rolls of paper and cut it in to usable sizes. The company also made envelopes there.
The leased Seattle offices were for a greeting card and note card subsidiary.
The company sold its Southworth-brand line of office paper to Neenah Paper of Wisconsin in 2012.
PCT Realty, buyers of the Agawam plant, is a partnership between Peter R. West and Corey J. Bishop of Adams and Tyler Nepote of Kansas.
Reached by phone Wednesday, Bishop said he wouldn't talk about PCT's plans for the Agawam property. But he said he and his partners own a number of industrial properties in the Berkshires. West and Bishop are real estate agents and own Bishop West Team Real Estate in Adams.
The Agawam plant, which includes a 146,000-square-foot building and 21 acres of land at 265 Main St., is zoned for industrial uses.
Southworth has two tenants in the building now, Collins said. He wouldn't say what they do. But when Southworth shut operations in August, much of the facility was being used to store empty cartons for Friendly's manufacturing operations in Wilbraham. On Wednesday there were trailers stored in part of the parking lot and passenger cars and trucks parked near an employee entrance.
Collins said Southworth has to pay off any debts owed municipalities in order for new owners to take title. It's paying the town of Montague $275,000 as that sale closes.
At this time, Southworth said it owes Agawam $128,000 in unpaid taxes, water and sewer charges and other municipal claims. Southworth's lawyers estimate that a municipal lien from Agawam will grow to $140,000 by the time the sale is final, which might not be until March 15.
Once Agawam is paid, Southworth also has to pay $50,000 in legal fees before it can pay its other creditors with money from both the Agawam and Turners Falls sales.
Southworth also owes Byline Bank $2.28 million and a lender called ACF $814,000.
Anything left over goes to the debtor, in this case Southworth, which still faces claims by other unsecured creditors including liens on the Turners Falls property placed by suppliers and contractors.
Agawam Mayor William Sapelli, in office for just two weeks, said the sale is good news. He had been curious what would become of the parcel, which is located among some major town employers.
Bankruptcy Court previously gave Southworth permission to pay employees who were owed for their last paycheck as well as benefits, sick time and vacation time. Those payments are in process, according to court documents.
A further hearing in Bankruptcy Court is set for Feb. 15.
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