The Wall Street Journal
Werthan Packaging Files for Bankruptcy
Tennessee-based company seeks expedited sale to rival Gateway Packaging
By Lillian Rizzo December 5, 2016
Paper packaging supplier Werthan Packaging Inc. filed for bankruptcy protection with a plan to sell itself to a rival company.
Cash-strapped Werthan, based in White House, Tenn., filed for chapter 11 and plans to sell itself to competitor Gateway Packaging Co. LLC for $7.2 million, according to papers filed in U.S. Bankruptcy Court in Nashville, Tenn.
The company is asking a bankruptcy judge to sign off on a speedy sale. Court papers say the sale procedures must be approved within 10 days of the bankruptcy filing, and the sale itself needs to be approved within a month.
“Given [Werthan’s] liquidity problems and cash burn, the proposed sale to Gateway is anticipated to be on a very expedited basis,” Chief Restructuring Officer Gary Murphey of Resurgence Financial Services LLC said in court papers filed Sunday.
Mr. Murphey said that if the sale isn’t closed in Gateway’s required time frame, “there is little chance that the debtor’s business would survive, to the detriment of employees, vendors, customers and creditors.”
The restructuring executive was hired in September to help Werthan find a buyer or a new source of capital, as well as assist on negotiations with lenders and trade creditors.
Court papers show that Werthan had expected to run out of cash by mid-November “without drastic reductions in purchasing and manufacturing,” and concluded a sale would be its best and only option. Gateway had signed a nondisclosure agreement in early November.
Werthan has more than $8 million in secured debt and roughly $4.4 million in unsecured trade debt, court papers show. In addition, it has an unfunded pension plan of more than $10 million, which the company said in court papers it attempted to terminate before the bankruptcy filing.
Werthan’s history dates back more than 150 years. The company manufactured textile bags in the early 1900s and in the 1950s expanded into the multiwall paper-bag industry. The company’s business changed over time, Mr. Murphey said, and by the turn of this century its packaging business was focused on the pet-products market.
In recent years Werthan has had to adapt to various changes. In 2010, it moved its operations to a new facility and then later invested in modern printing technology.
But the business began to suffer when the pet food industry moved to plastic bags. While Werthan invested in new printing technology that would position it in the plastic packaging market, its sales lagged behind, which put a big strain on the business, Mr. Murphey said.
Werthan employs about 89 people, of which 66 people are paid hourly and 23 receive salaries. Lender VFP Asset Funding LLC/Veritas is providing the company with a bankruptcy loan so it can keep its doors open and pay employees pending a sale.
The Nashville law firm of Bass, Berry & Sims is handling the chapter 11 case. Judge Marian Harrison has scheduled a hearing on Werthan’s initial bankruptcy requests for Tuesday morning.
The Nashville Business Journal
by Brian Reisinger, Staff Reporter Date: Monday, March 5, 2012
A restructuring expert who's no stranger to high-profile Nashville cases will take the helm of Citizens Corp.'s bid to reorganize through Chapter 11 bankruptcy proceedings.
Gary Murphey, of Atlanta-based Resurgence Financial Services, has been named trustee in the Citizens case, according to court records. He'll be responsible for guiding the company through Chapter 11 in lieu of chairman Ed Lowery, whom Judge Marian Harrison expressed deep doubts about in a recent opinion calling for a trustee.
In a phone call today, Murphey said his initial concern will be tending to Financial Data Technology Corp. The core processing provider is Citizens' chief asset and has been at the heart of a fight Lowery waged against various creditors, as the Nashville Business Journal previously reported.
"Obviously my first order of business will be to ensure that FiData continues to operate profitably, and evaluate the various steps I can take with that operation," Murphey said.
He said he'll also begin to evaluate other causes of action by parties in the case, though it's early to say what specific steps are next. Observers are waiting to see what he decides about Lowery's reorganization plan, control over FiData and various other issues.
Murphey has done plenty of work in Nashville. He was previously involved in proceedings surrounding Southeast Waffles, a company that owned and operated dozens of Waffle House restaurants in Tennessee.
At this point the Citizens proceedings could go in numerous directions, given the broad web of ventures and debt that Lowery has ties to in the Nashville area and other parts of the state.
September 14, 2006
Florida-based Diamond Oil on Sept. 13 declared itself as the successful bidder on 28 Kwik Sak convenience stores formerly owned by Purvi Petroleum. The $18.1 million sale comes nearly two years after the Nashville chain filed for bankruptcy protection in 2004.
"This acquisition is another step in Diamond's growth strategy," said Jay Patel, Diamond Oil's CEO. "We are actively seeking acquisitions where our fuel distribution services and in-store sales expertise can quickly impact underperforming stores."
The stores were originally part of Marathon Ashland Petroleum, a joint venture of Marathon Oil and Ashland Inc. "Purvi acquired the 28 stores in 2002, but could not turn a profit," stated convenience store turnaround expert Gary Murphey, who came in as chief restructuring officer in 2005 and later became the trustee. "We restructured the operations and immediately commenced turning a profit," he continued. "Although we paid off millions of debt and there will likely be a distribution to unsecured creditors, it was clear that additional investment was needed to take these stores to the next level."
"That's where Diamond comes in," said Patel. "With the squeezing of fuel profits, our focus has been on maximizing inside sales. With fuel margins so thin that you have more profit in a cup of coffee than 5 gallons of gas, it doesn't take long to figure out where your priorities should be," he concluded.
From Fitness Business Pro
Newly Appointed Fuel Fitness Trustee Plans to Sell Club Chain
NASHVILLE, TN The U.S. Trustee Program appointed Gary Murphey as the trustee of the Fuel Fitness chain that is undergoing Chapter 11 proceedings. Murphey, whose term began Aug. 2, is overseeing the chain's day-to-day operations, including the restructuring of the company's finances. He has 20 years in turnaround experience and is one of 400 Certified Turnaround Professionals.
In mid-July, a bankruptcy court judge named Murphey the company's chief restructuring officer. Soon after, Fuel Fitness owner Manny Butera left the company to pursue other business interests. Fuel Fitness (formerly Total Fitness Systems) filed for bankruptcy last December. Murphey, whose office is in Atlanta, says he is seeking new investors and hopes to have a new owner lined up by the end of the year. "The company is profitable," Murphey says. "If I can't get the right price, I have no problem running these clubs for another 12 months."
Once a new owner takes over Fuel Fitness, the money spent to purchase the company will go to secured and unsecured creditors, and for administrative claims and operating costs, Murphey says. Any money left over will go to Butera, Murphey adds. The U.S. Trustee Program is paying Murphey on an hourly basis. Butera closed several of his Fuel Fitness clubs, including two in Chattanooga, TN, and two in Atlanta, as well as a tanning salon in Nashville, TN. Two more clubs in Huntsville, AL, are in pre-sale, Murphey says.
The five remaining Fuel Fitness clubs, four in Nashville and one in Clarksville, TN, are receiving improvements such as upgraded equipment, Murphey says. The clubs are still offering one-year memberships at $35 per month. "I can foresee nothing but good things for the company," Murphey says. "The price point is half of what the competition charges."