Leisure Time Spring Water Co.'s death averted
Canadian firm to buy assetsvar isoPubDate = 'March 28, 2009'
POUGHKEEPSIE — The assets of Leisure Time Spring Water will be sold to a Canadian company that promises to preserve most of the company's 50 jobs, thanks to a last-minute deal reached Friday afternoon in U.S. Bankruptcy Court.
Boreal Water Collection, a company based in Quebec and incorporated in Nevada, will pay about $2.5 million for the assets of A.T. Reynolds & Sons Inc. The 125-year-old spring water company in Kiamesha Lake, which does business as Leisure Time, had been operating under Chapter 11 bankruptcy protection since December.
Most of the money will go to the company's largest creditor, Wells Fargo Bank, which had liens against the plant and its equipment. Boreal will also pay $113,000 in back real estate taxes.
Boreal's offer edged out another bidder who promised more money but couldn't consummate a deal as quickly. Time, in this case, was of the essence.
New York State Electric & Gas Corp. threatened to cut off Leisure Time's power on Monday if it didn't pay overdue bills, and a plant shutdown might have killed the sale.
While under bankruptcy protection, Reynolds burned through its available cash more quickly than anyone expected, and it failed to pay a number of bills, including NYSEG's.
After six hours of negotiation in and out of the courtroom Friday, all the necessary parties except the utility company had approved Boreal's bid.
In the end, Wells Fargo agreed to pay NYSEG $35,256.23 to keep the lights on. The bank will recoup some of the expense through a higher interest rate on its loan to Boreal.
"We will encourage the purchaser to seek wind and solar going forward," said Jeffrey Wurst, Wells Fargo's lawyer.
NYSEG did better than most of the company's creditors, who will receive nothing more than the chance to pick up a new client.
"In the current economic climate, that's something that cannot be ignored," said Ken Rosen, the lawyer for the committee of unsecured creditors.
Boreal expects to complete the purchase by the end of next week. It will sell off Leisure Time's delivery business for $700,000, with Dowser, the Pepsi water brand, expected to pick up the New York operations, and Black Bear the New Jersey business.
Boreal plans to keep the 30 to 35 people who work inside the Kiamesha Lake water plant, said CEO Francine Lavoie. The fate of the drivers will depend on the companies buying the delivery businesses.
"The companies told me they intend to hire them," Lavoie said.
Two Reynolds executives will be required to sign noncompete agreements. Harold Bruce Reynolds, the company's president, filed for personal bankruptcy March 11 to avoid being held liable for company debts he had personally guaranteed.