The transportation and logistics firm that will be leasing almost half of the former Bristol-Myers drug-manufacturing plant on Forest Avenue in Buffalo is now in federal bankruptcy court, after seeking to stave off a foreclosure of its current headquarters and warehouse property.
Regional Integrated Logistics filed for court protection in late December under Chapter 11 of the U.S. Bankruptcy Code – one day before its Kenmore Avenue property was slated to be auctioned off in a foreclosure sale.
The filing triggered an automatic “stay” of the foreclosure, putting the latter legal process on hold until the court can evaluate the situation and settle the details of the bankruptcy.
In turn, that gave the transportation company time to negotiate with the holder of its mortgage – which it says is a local competitor – so it could remain on site just long enough for it to complete its move to its new home at 100 Forest Ave. An agreement is now in place – enforced by a court order – that allowed the mortgage holder to complete the foreclosure but lets Regional Integrated stay through the end of February, rent-free.
“It was something that we had to do,” said Regional owner and President Robert Bingel, whose company employs about 100 people. “We needed to do this in order to protect the business on a short-term basis.”
The bankruptcy petition was submitted Dec. 26. just as word emerged of the company’s plan to lease the new property for what Bingel had described in positive terms as a consolidation of multiple sites, with some possibility of future expansion. No mention had been made of bankruptcy, foreclosure or other problems.
Bingel said that’s because the filing was never about financial struggles at the company or any effort to shirk debt. The bankruptcy petition cites total liabilities of between $1 million and $10 million, and specifically lists debts of more than $7.3 million owed to its top 20 creditors, including its mortgage holder, two law firms and a temp agency. But aside from the $5.33 million mortgage – which the company had fallen behind on during the recession when its sales plummeted – it’s current on all of its other payments, he said.
“We didn’t do this so we could get out of paying our vendors. We’ve had a good relationship with all of our vendors,” he said.
Rather, he called it a strategic move to ward off an eviction by what he described as a rival – whom he declined to name – after more than a year of fruitless negotiations to either fix the remaining delinquency or buy him out. He said he never missed a mortgage payment.
“It wasn’t a financial bankruptcy. It was a strategic bankruptcy, to buy time to transition to the new facility,” Bingel said.
Bingel hopes to be out of bankruptcy shortly, possibly as early as late next week, depending on how soon the court signs off. The company will be at its new site by late February. Regional Integrated will occupy about half of the sprawling property on Forest Avenue, with two warehouses.