Story posted Friday, June 5, 2009
Judge Ruling May Save Hartmarx
By TOM ROBB Journal & Topics Reporter
President Obama might not need to find a new tailor after all.
U.S. Bankruptcy Court Judge Bruce Black on Tuesday approved a preliminary agreement in Chicago that would enable Emerisque UK to acquire the Hartmarx Company later this month bringing it out of bankruptcy. Hartmarx filed for Chapter 11 bankruptcy protection from its largest creditor, Wells Fargo Bank, earlier this year.
Service Employees International Union (SEIU) officials, who represent 600 workers at the Des Plaines Hart Schaffner Marx clothing plant where Obama's suits are made, were cautiously optimistic about the ruling.
Monday's court action effectively eliminated two other competing bids for the company, one of which would have liquidated Hartmarx, putting 3,500 workers on the unemployment rolls, according to Illinois SEIU Communications Director Ray Quintanilla who was in court Monday.
A union official representing Hartmarx workers told the Journal & Topics Newspapers that during the court proceedings a lawyer for Hartmarx said, "If there is no agreement today there will be liquidation tomorrow."
The judge selected Emerisque as the preferred bidder from offers currently on the table, said Quintanilla. However, if a higher offer came along for the company that would lead to liquidation, that bid would still be considered.
Quintanilla said the judge granted several recesses Monday as attorneys for Hartmarx and Wells Fargo worked out the deal in a hallway outside the courtroom.
Wells Fargo in the past characterized Emerisque's offer as "not credible" and last week said it made no guarantees to keep plants open.
Quintanilla said Emerisque has made a commitment to keep manufacturing and production in the United States and told union officials the Des Plaines plant was very important to their operations.
Wednesday a spokeswoman for Wells Fargo said the bank had no comment on Monday's court action.
Wells Fargo has been under increasing pressure from local, state and federal elected officials to rule out any option to liquidate the company as it took $25 billion in federal bank bailout money.
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