This litigation is directed towards the old Werner company, not the new and improved version.
It is important to make a distinction as they went out of their way to explain this in the
preceding press release. To clarify this 'simple' distinction between the two separate companies
with the same name that employ the same people in the same factories and make the same product,
one is defunct and in bankruptcy while the other is thriving and continues to provide us with
the same product we have 'come to know and love over the decades.'
“Creditors of ladder maker Werner Co. have sued the company’s former owners and other insiders for more than $1 billion in damages, accusing them of stripping nearly $500 million in cash out of the company before its bankruptcy liquidation.
An expensive bid to reorganize the Greenville, Pa.-based company in Chapter 11 failed last year, leaving hedge funds including Levine Leichtman Capital Partners to take over Werner’s remaining operations in a deal that left more than $1 billion in unpaid debt.
“Shareholders and insiders transformed the otherwise successful company into their own mint, causing it to incur hundreds of millions of dollars in unnecessary bank and bond debt,” say court papers filed Thursday in the U.S. District Court for the Southern District of New York.”
The article further informs the reader that many of the jobs have moved to Mexico.
“While the insiders cashed out, jobs were transferred to Mexico, and the Werner work force was chopped in half, the case says. “
http://www.boston.com/news/world/europe/articles/2008/01/25/werner_creditors_sue_for_1b/
This is a frightening aspect of our legal system that provides a loophole big enough to drive a truck through. On one hand, they clearly state that they have nothing to do with the previous company.
“Werner Co. is a newly formed corporation that purchased substantially all the assets
of the old Werner companies during their bankruptcy in 2007. New Werner is a separate
company and is not a party to the litigation involving the remnants
of the former companies.”
Yet in the very next paragraph they seem to want to remind us that they are the same old company we’ve known for years.
“Werner continues to be a strong, growing and vibrant company and its
employees are committed to maintaining Werner's position as the leading
climbing products manufacturer and distributor in the world," said Bill Allen,
Chief Executive Officer of Werner. "Our product line and customer service
continues to be world class in our industry."
Which one is it? Are you the New Werner Holdings or the same old Werner that is subject to litigation and allegations of corruption? The corporate laws in the United States provide large corporations with loop holes tailor made for their every need. This is a classic example of someone trying to put lipstick on a pig.
They summarize their statement with the following quote.
“Unfortunately, new Werner Co. continues to be mistaken for the former company that
was in bankruptcy," said Mr. Allen.”
“We are extremely disappointed that there has been confusion regarding this case and
new Werner will continue to work to assure that it doesn't experience any negative
impact from this lawsuit."
Source
http://www.reuters.com/article/pressRelease/idUS184193+29-Jan-2008+PRN20080129
The Werner Ladder Company, in general, makes good ladders. However, there have been several issues with design and quality specifications that have generated many lawsuits over the years. There have also been questions raised over the previous managements actions being in line with the interests of the shareholders.
Due to the interest and limited access to information on this subject I thought I’d start this Web Log in an attempt to aid people in their research and give them an area to to share any additional information that could be of interest to other people in similar circumstances.
If you have any valuable information to share with my readers please leave a comment under the appropriate thread.
Thanks