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The Herald Courier

Bristol Antibiotic Plant Purchased

By Maria Basileo April 28, 2021

BRISTOL, Tenn. — An Atlanta-based health care firm has purchased the former Neopharma Tennessee building on Industrial Drive in Bristol, Tennessee, with plans to reopen the manufacturer of antibiotics products.

Jackson Healthcare acquired the almost 370,000-square-foot building — to be renamed USAntibiotics — with the notion it’s the last manufacturing facility in the country authorized to produce Amoxicillin and Amoxicillin Clavulanate, the company said in a news release.

“We could simply not stand by and allow this essential antibiotic manufacturing facility to close,” said Rick Jackson, founder, CEO and chairman. “The national security implications and ability to reduce our dependence on foreign production of life-saving medications are among the key factors that led to our decision to make this purchase and investment.”

The company could not be reached Tuesday to answer questions about when it will reopen and how many jobs will be created.

Pharmaceutical manufacturing company United Arab Emirates-based Neopharma Tennessee previously operated out the building but closed in August 2020. More than 40 workers lost their jobs.

Prior to that, it served as the former Dr. Reddy’s Laboratories until 2018.

According to a news release from Jackson Healthcare, after patents to produce Amoxicillin and Amoxicillin Clavulanate expired, Neopharma began to produce generic equivalents. The company faced economic pressure leading to its bankruptcy, the release states.

“We are now beginning the critical work that goes with restarting the facility,” Jackson said. “It has a deep history and proven track record of tremendous production power and quality.”

The site has been designated by the U.S. Department of Homeland Security as a critical manufacturing infrastructure facility, and at full capacity, it can produce billions of doses of antibiotics yearly, the release said.

“We look forward to bringing it back to full capacity and all that will mean for Americans who need these vital antibiotics,” Jackson said.

“This is a new day — an incredible day for America and the people of Tennessee,” said Gary Murphey, Trustee for the estate. “Under American ownership for the first time since its founding, this is a story with the optimal outcome — one that will help save lives, provide new job prospects, and keep production of core antibiotic medications in the U.S. to protect our people and our interests.”

According to the State of Tennessee Comptroller of the Treasury Real Estate Assessment Data, the 2021 assessment for the property is more than $6.3 million.

Jackson Healthcare is a privately held group of specialized health care staffing, search and technology companies founded in 2000.

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.


From NPNweb.com

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."

From The Tennessean  October 22, 2008

Waffle House franchisee's job is at stake

Gary Murphey, left, a court-approved chief restructuring officer, talks with employees Mike Lheureux and Makayla Hendricks while having a cup of coffee at the Waffle House on Elm Hill Pike in Nashville.

By Wendy Lee

Local entrepreneur James L. Shaub II's job running SouthEast Waffles, a 113-restaurant Waffle House franchise based in Nashville, remains under the scrutiny of creditors amid whispers of missing millions and the shadow of a pending Chapter 11 bankruptcy hearing.  Next week, Shaub could lose his job at what is now the second-largest franchise under the umbrella of Norcross, Ga.-based Waffle House, which granted SouthEast Waffles its franchise here.

Executives with the Waffle House parent company want a bankruptcy judge to oust Shaub from the franchise he bought nearly a decade ago and stop his $20,000-a-month executive salary.  The Georgia-based chain isn't in bankruptcy itself - only Shaub's franchise is mired in the court proceedings. A court-approved turnaround specialist has been appointed to help run the franchise with Shaub serving as his adviser.

Shaub, known for his work at several community nonprofits, including holding a seat on the board of Cheekwood Botanical Garden and Museum of Art, says he was unaware of an alleged check-kiting scheme that creditors say operated through his franchised restaurants.  "I invested 15 years of my life in this company," said Shaub, a Vanderbilt University economics major and an ex-banker. "This has been devastating to me and my family. I would not have done anything to harm any work that I've done."

SouthEast Waffles reported sales of $67 million for the fiscal year that ended in May. But officials at SunTrust Bank said in early August that they discovered "a massive check-kiting scheme perpetrated over several months," according to court documents. Check-kiting refers to a customer's passing worthless checks between banks.  SunTrust officials say the bank lost about $3.7 million, according to court documents. FirstBank of Lexington, Tenn., which had a loan agreement with SouthEast Waffles, says in a court filing that it's owed $12 million.

IRS says it's owed $2.8 million

SouthEast Waffles filed for Chapter 11 bankruptcy protection in August, with $50 million in debts and $10 million in assets, court records show. Among other debts, the company owes nearly $2.8 million in federal employment taxes to the IRS, according to a claim filed in court.  Since September, Internal Revenue Service officers have copied files on the company's computer server that contained financial information, and the FBI has interviewed some employees, said Gary Murphey, the chief restructuring officer. The IRS and FBI declined to comment.

Shaub, 51, acknowledges that he was ultimately responsible as the franchise's chief executive, but said he delegated responsibility for company finances to Chief Financial Officer Becky Sullivan, who left the company earlier this summer as allegations of missing funds first surfaced.  Shaub said most of his time was spent out of the main office, surveying far-flung operations and even cooking alongside employees. "The financial side was ultimately my responsibility, too, but I felt I had delegated that over," he said.

That argument "doesn't make any sense," said Jon Waller, general counsel for Waffle House Inc., the Georgia-based parent. "While we encourage and ask our principal operators to work in the restaurants . we also expect (them) to manage the business prudently."  Sullivan, the deposed chief financial officer, declined to comment. Her attorney, Peter Strianse said: "Whatever she did in her employment at SouthEast Waffles was done at the direction of Mr. Shaub."

Last month, the court approved Murphey, 46, to oversee operations and figure out SouthEast Waffles' finances. "All I can tell you is the books and records are a mess," Murphey told The Tennessean. Murphey's stay can be extended if all parties involved in the case agree to it.

Fate to be argued in court

Shaub gets his $20,000 monthly salary, plus health-care benefits, until December, according to court documents. Shaub's fate  - basically whether he will be allowed to stay at the company - will be argued next Tuesday in court.

For now, Murphey has Shaub auditing store managers' weekly reports, overseeing maintenance and making sure managers' specials are consistent across all the restaurants. He has even worked shifts that include busing tables, cooking food and serving customers, Murphey said.  The court-approved turnaround expert said he trusts Shaub with those tasks and has "no problem with Jim performing the duties that I've assigned to him."  Murphey said the franchise remains profitable, and each store averages $10,900 in weekly sales.

Waller, the Waffle House parent company's attorney, said it's too soon to discuss the future structure of SouthEast Waffles, but added "we do expect that Waffle House as a brand will remain a strong brand in those markets."

Meanwhile, Shaub resigned last month as chairman of the board of trust at Cheekwood, where he oversaw a $6 million annual budget and met face-to-face with donors. However, he remains a member of Cheekwood's board.  Other Cheekwood board members said they stand by Shaub.  "Many of us were taken off guard. Certainly I was," said Dr. Paul Sternberg, the board's new chairman. He said Shaub "has been very committed and has really done an excellent job and has shown integrity in everything he has done."

Shaub said he remains hopeful that SouthEast Waffles can get back on its corporate feet.  "The people that know me know my character. They know I wouldn't be involved in anything like that," Shaub said.


THE BUSINESS JOURNAL OF THE TRI-CITIES TENNESSEE/VIRGINIA

April 07, 2017

By Scott Robertson

Brimhall Foods, Inc., of Bartlett, Tenn., won a March 7 auction to acquire the assets of Kingsport, Tenn.-based Pure Foods. The maker of the Brim’s brand of snack foods will occupy the building in the Gateway Commerce Park near the intersection of Interstates 81 and 26, employing the remaining 20 PureFoods employees.

Pure Foods had announced a temporary shutdown of the facility in Oct. 2016 before filing for Chapter 11 bankruptcy protection on Jan. 30.

The 87,000-square-foot building is a certified organic, gluten-free, non-GMO snack manufacturing facility, built new for Pure Foods by J. A. Street in 2015. In addition to the building itself, Brimhall acquired a corn cooking system, a fried food manufacturing line, a baked food manufacturing line, an extruder manufacturing line, a packaging system consisting of inline conveyors, horizontal motion conveyor loops, scale platform, and both Bosch and Matrix baggers, and a state-of-the-art testing laboratory for new product line development.

Pure Foods had occupied the Kingsport facility under a ten-year lease with a purchase option at the end of the lease. The purchase price option was based on the outstanding debt, reduced by rent payments to the Kingsport Economic Development Board. The current debt is estimated to be approximately $6 million.

Brimhall will essentially take over the terms of the Pure Foods lease, which still has around eight years remaining with an option to buy. The purchase price has not been released, but the auction included a minimum bid of $3.2 million. Three bidders were identified prior to the sale. Resurgence Financial Services handled the sale for Pure Foods.

 

 
 
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