A Chattanooga custom tooling design and computerized manufacturer has filed for bankruptcy to avoid a foreclosure against the business's riverport factory.
East Tech Co., an 11-year-old firm that moved into a River Terminal Road facility seven years ago, is reorganizing its finances under bankruptcy court protection after owner Roger Layne filed a Chapter 11 petition on Monday
"We filed the bankruptcy petition to stop the planned foreclosure sale today," Layne said Tuesday. "Our sales peaked in 2008 and we've had some ups and downs since, but the main problem was our inability to work out anything on the building note."
Layne said a 5-year balloon loan originally made by BB&T was acquired by another lender and business and still has $1.79 million to be paid. East Tech, which employs 14 people, didn't grow enough to support the loan repayment, Layne said.
"We're continuing our business and I've talked with vendors to let them know they shouldn't lose any money," he said.
Layne said he has invested $2.2 million in the building and $3 million in equipment in the plant.