A company has made a $1 million bid for Phillips Brothers Machine Co., the LaFayette, Ga., business that operates in the former Blue Bird factory and filed for bankruptcy earlier this year.
The new business, known as Phillips Consolidated, could triple the number of employees to nearly 300 if the deal goes through within two or three weeks, an official said.
"It could be that likelihood," said Larry Brooks, the Walker County Development Authority's executive director.
U.S. Bankruptcy Court papers show that Phillips Consolidated, whose principals are said to be unconnected to Phillips Machine, offered a so-called "stalking horse" bid of $1.07 million for substantially all the distressed company's assets.
The stalking horse price sets the bar so that other bidders can't low-ball the purchase of a company.
Other bids for Phillips Brothers, a machining, welding and fabrication business, are being accepted by attorneys for the two companies until 5 p.m. June 1, according to court papers. If more than one bid is submitted, an auction is slated to be held June 2.
If no other bids are received, a court hearing is slated for 11 a.m. June 4 for the purpose of approving the sale.
Attorneys for the two companies couldn't be reached for comment.
But Brooks said he's expecting the matter to be decided in two to three weeks, though he was working under a nondisclosure agreement and couldn't give details about the new business. However, he said Phillips Consolidated is part of a conglomerate from outside the area.
"They'd be coming in and infusing interesting opportunities for that plant out there," Brooks said. "Everything is moving along nicely."
Phillips Brothers makes such products as the arms which pick up trash cans attached to garbage trucks, including those belonging to Heil Environmental. It moved into the former Blue Bird plant three years ago.
However, the company filed for Chapter 11 bankruptcy in March. Court filings showed it has liabilities of $3.5 million versus assets of $1.8 million.
At a court hearing in Chattanooga, a Phillips Brothers attorney said the business continues to operate and that its sale was under negotiation.
Attorney Jerrold Farinash at the time said the company employed 92 people. That figure could triple with the sale, he said.
The development authority owns the Blue Bird property, which was used for many years to produce school buses until the factory shut down in 2010. About three years ago, the authority issued about $3 million in industrial revenue bonds to buy the 271,000-square foot plant as an enticement to get Phillips Brothers into the site, according to news archives.
In 2012, Phillips Brothers announced plans to hire 40 more workers and keep the remaining 60 employees as it moved into the former Blue Bird site.
The county doesn't pay anything out of pocket and Phillips Brothers made the mortgage payments. But by issuing the bonds, the county keeps the plant off the property tax rolls for 10 years.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.