Denman Tire Files for Bankruptcy

US based industrial tyre manufacturer Denman Tire Corporation has filed for Chapter 7 bankruptcy in the US Bankruptcy Court Northern District of Ohio, reports Tire Review. This action ends an almost two-year struggle to stay afloat in the face of a brutal economy and heavy pressure from imported tyres.

The OTR and industrial tyre maker celebrated its 90th anniversary last year. Now its offices and production plant in Leavittsburg, Ohio – and a warehouse in nearby Austintown – lie vacant, waiting for court-ordered liquidation to begin. The company ceased operations on February 23, giving its required 60-day closure notice as required by federal law. While Denman officials said they were continuing to seek additional funding or a buyer, those efforts apparently fell short, forcing today’s bankruptcy announcement.

Over the last several months, smaller groups of employees were laid off in increments. In early February, production workers were sent home from work and told not to return until further notice. A subsequent meeting of USW members revealed that the Denman’s bank had refused to extend any more credit to the tyre maker. In all, Denman’s closure meant some 270 lost jobs.

Sandy Pensler, the president of Pensler Capital Corporation and Denman CEO, offered no public comment on the filing. His Pensler Capital is majority owner of Denman Tire, with a 76.5 per cent holding. Pensler Capital bought its stake in Denman in 1996. Also listed as equity owners was Interco Investment Group, with 20 per cent. A Handful of individuals, including retired Denman president Charles Wright, held stakes of one per cent or less.

The Chapter 7 filing means the court will set a liquidation of all of Denman’s property and assets, and manage the distribution of proceeds to its creditors.