LCIDA Will Not Continue Lease Payments on Climax Equipment

Lowville

The Lewis County Industrial Development Agency held their regular

monthly meeting this morning, where the board unanimously voted to

discontinue making payments to Utica Leaseco for the equipment at the Climax

plant here.

"From everything that I've learned, I don't think we need to make another

payment," Eric Virkler, Executive Director of the IDA, told the board.

The IDA made a $52,000 payment in April to cover the equipment lease of

$49,000 as well as associated late fees for the month. The

on June 15th via an online auction through Thomas

Auctions. The equipment will be available to preview on June 13th and 14th.

Depending on the outcome of the auction, the IDA may be able to recoup the

amount of the payment they made previously. If the equipment sells at a price

where all expenses have been covered, Utica Leasing Company had agreed to

refund the payment, or a portion thereof, from any profits of the auction.

Mr. Virkler told the board that he has devoted a lot of time to the Climax

situation over the past month. He has reached out to potential buyers, done

extensive research, and has looked into what options were available. He stated

that at this point there doesn't seem to be "a lot of potential" for reopening the

plant.

One big problem seems to be the amount of debt owed by the company. Delta

Point Capitol, the investment firm that owns Climax, has not expressed any

intention to enter Climax into bankruptcy proceedings.

It appears that ownership of the building and property in Lowville, assessed at

$2.9 million, was transferred in 2014 to a separate holding company, with some

financing provided by Carthage Specialty Paper, another Delta Point owned

company. The property possibly holds a mortgage in the $3.5 million range. Mr.

Virkler also told the board that there was approximately $5 million in debt owed

to unsecured creditors.

The IDA still hopes to persuade any potential buyers of the equipment the

benefits of reopening the plant here in Lowville.

LCIDA Will Not Continue Lease Payments on Climax Equipment
05/05/16 01:30pm

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