Harper Brush gets 4 more months to work out bankruptcy

FAIRFIELD -- A bankruptcy judge has given Harper Brush Works of Fairfield at least four more months to operate in bankruptcy.

The iconic Fairfield company had filed for reorganization May 29, struggling after the loss of business from Home Depot caused cash flow problems.

The filing under Chapter 11 of the federal bankruptcy code typically allows a financially struggling company time to reorganize its finances or find a new owner.

UMB Bank of Kansas City, the largest secured creditor of Harper Brush Works, had objected to the company's plans to borrow money from another lender so it can continue operations. UMB has declined to loan additional funds to Harper.

The lender also objected to the Fairfield manufacturer's plans to use payments from customers and other "cash collateral" to fund continuing operations.

In a ruling last week, Southern District Bankruptcy Judge Anita Shodeen allowed Harper Brush Works to use operating cash coming into the company until Dec. 14. She said the deadline could be reconsidered under several conditions. They included financing agreements worked out amicably between UMB Bank and Harper Brush Works.

The judge rejected Harper Brush Work's petition to obtain DIP, or debtor in possession, financing. The company's financing terms had come under fire from creditors as too costly.

Fairfield Brush Works has since filed motions seeking the judge's approval to hire a financial adviser and an investment banker. The investment banker would help work out a possible sale of the business.

Fairfield Economic Development Association Executive Director Tracy Vance is a member of the committee that represents unsecured creditors in the bankruptcy case.

"I think it's the best possible scenario we could get," Vance said.

He said an effort is under way with the city of Fairfield, the company and the company's unsecured creditors, among others, to find a buyer for the family-owned business.

Vance said Harper Brush Works indicated in court filings that it believes the cash collateral will provide an adequate revenue stream to fund production of orders for the time being.

Harper Brush Works, which  dates back 112 years to its founding in Fairfield, and has about 70 employees.

Harper Brush Works specializes in durable and high-quality brooms and brushes.

The city and the economic development authority helped put together a $300,000 assistance package last year to encourage the company to consolidate operations from a North Carolina plant to  Fairfield.