Halibrand Engineering Corp. Inc., a business started in 1947 in Wellington, Kan., has converted its Chapter 11 bankruptcy reorganization to Chapter 7. While the business will soon close, a new company has been created in its place, called Halibrand Performance Corp. Inc.
Richard LeJuerrne is president and CEO of Halibrand Performance, as well as Halibrand Engineering. When he formed Halibrand Performance last year, the business bought the old company’s tangible and intangible assets, including equipment. The money went to Fidelity Bank, which was a creditor.
It had become clear, LeJuerrne says, that reorganizing wasn’t going to work for Halibrand Engineering.
Halibrand Performance now operates in much the same way as Halibrand Engineering, but LeJuerrne says some changes have been made to assure that the company doesn’t go through the same problems as before.
Aircraft part manufacturer Triumph Group Inc., based in Pennsylvania, is listed as the biggest secured creditor. It is owed $650,000. Triumph has been given back inventory it had consigned to Halibrand, but LeJuerrne says he is unsure if the company has been paid back in full. Triumph officials did not return calls for this story.
According to the Halibrand bankruptcy file, there are more than 25 creditors in and around Wichita who are listed as having unsecured, nonpriority claims.
The Chapter 7 liquidation indicates that there is nothing of value left to pay off those creditors.
“The bottom line is there are no assets,” LeJuerrne says.
Some Wichita creditors listed in the bankruptcy filing include Dealers Leasing, Fidelity Bank and City Blue Print. Dave Anderson, owner of Dealers Leasing, says his company was never paid for leasing a tractor to Halibrand about two years ago. Dealers Leasing is owed about $20,000.
“As an unsecured creditor, the likelihood of us collecting anything is very low,” he says.
Even though Halibrand is a totally new company now, Anderson says he isn’t willing to take the risk by doing any work with it.
“Once stung, we probably wouldn’t go back to the trough another time,” Anderson says. “Actually, I can unequivocally say we would not. There would be absolutely no compelling reason for us to ever do business with him again.”
Toby Ward, co-owner of Custom Polishing Pros, says he isn’t worried about the future of the new Halibrand company. Ward started working with Halibrand last year, after it had changed to Halibrand Performance. He says he’s consistently getting paid and will continue to work with LeJuerrne.
“I have faith in the guy,” Ward says. “He’s been around a long time.”
Halibrand Engineering originally filed for Chapter 11 reorganization in August 2001. LeJuerrne says the business was doing fine until a major supplier filed for bankruptcy. That caused sales for Halibrand to drop considerably. According to bankruptcy filings, net revenue at Halibrand went from about $1.7 million in 2000 to $821,000 in 2001.
Halibrand stayed in Chapter 11 for a while and tried to reorganize, but the effects of Sept. 11, 2001 derailed the plans.
Halibrand Engineering will eventually dissolve, leaving only the new corporation in business.
Halibrand now makes one-piece wheels from aluminum and magnesium, as well as rear axle assemblies and other accessories for after-market vehicles. LeJuerrne says Halibrand always sold directly to end users, but he recently realized that more money could be made by selling to big distributors. That’s something Halibrand will now focus on to build its business.
“The good news is the new corporation doesn’t have any debt,” he says. “This just brings to closure all of the problems Halibrand Engineering had and allows us to move forward.”