Local factory files for bankruptcy

Phillips Brothers files for bankruptcy; sale of LaFayette plant sought

Randy Phillips, owner and president of Phillips Bros. Machine Co., sits next to his first new piece of equipment, a 14-ton press designed to shape steel, inside his company's new location at the former Bluebird manufacturing plant in LaFayette in 2012.
Randy Phillips, owner and president of Phillips Bros. Machine Co., sits next to his first new piece of equipment, a 14-ton press designed to shape steel, inside his company's new location at the former Bluebird manufacturing plant in LaFayette in 2012.

A LaFayette, Ga., company that moved into the former Bluebird plant three years ago has sought bankruptcy protection as its owners pursue a sale of the business that could triple the factory's workforce.

Phillips Brothers Machine Co., a machining, welding and fabrication business, filed for Chapter 11 bankruptcy last week. Filings showed it has liabilities of $3.5 million versus assets of $1.8 million.

At a U.S. Bankruptcy Court hearing in Chattanooga on Monday, a Phillips Brothers attorney said the business continues to operate and that its sale is under negotiation.

Attorney Jerrold Farinash identified the name of the potential buyer as Phillips Consolidated. He wouldn't name the principals of the company, but said they're not related to Phillips Brothers President Randall Phillips.

Farinash said Phillips Brothers now employs 92 people. That figure could triple with the sale, he said.

"They could significantly increase the workforce," Farinash said.

Larry Brooks, the Walker County Development Authority's executive director, said he couldn't talk about the potential sale due to a confidentiality agreement.

But, he said, he expected a possible new owner to operate under the same terms that Phillips Brothers has with the authority, which owns the Bluebird property.

About three years ago, the authority issued about $3 million in industrial revenue bonds to buy the property and then lease the site to Phillips Brothers, which expanded its business to the 271,000-square-foot facility.

Bluebird once was one of Walker County's biggest employers, but it shut down its school bus manufacturing plant in 2010.

In 2012, Phillips Brothers announced plans to hire 40 more workers and keep the remaining 60 employees as it moved into the former Bluebird site.

photo Randy Phillips, owner and president of Phillips Bros. Machine Co., sits next to his first new piece of equipment, a 14-ton press designed to shape steel, inside his company's new location at the former Bluebird manufacturing plant in LaFayette in 2012.

Phillips Brothers makes such products as the arms which pick up trash cans attached to garbage trucks, including those belonging to Heil.

Walker County Commissioner Bebe Heiskell, too, wouldn't provide details of a possible sale, but said that "It's a very positive thing."

"It's not a problem for us," she said, adding she's hopeful the site may once again employ as many people as it did when Bluebird owned it.

Farinash told Bankruptcy Court Judge Shelley D. Rucker that Phillips Brothers payroll is between $60,000 and $70,000 a week.

Court filings showed that, among the companies owed money by Phillips Brothers, are Joseph R. Ryerson & Son, $1.07 million; Cornerstone Community Bank, $973,000; Siskin Steel Co., $291,000; and Heil Environmental, $121,000.

The judge set a new hearing for April 8.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.

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