F&E files Chapter 11 for composting affiliate Action could keep permit in valid status

March 02, 1996|By Jay Hancock | Jay Hancock,SUN STAFF

F&E Resource Systems Technology Inc. has put its Baltimore composting affiliate into bankruptcy proceedings but hopes to reopen it after reorganizing its balance sheet.

F&E itself, based in Annapolis and the operator of landfills in several states, has not sought bankruptcy protection. The Chapter 11 filing for its Baltimore facility, in U.S. Bankruptcy Court in Baltimore, came after a lender moved to foreclose on the plant, said Paul Williamson, executive vice president for F&E.

Credit Suisse, the major creditor, has a $35 million mortgage on the land and compost plant in Baltimore's Curtis Bay area. F&E had been negotiating with the bank to restructure the loan, and last month F&E officials said they hoped to avoid bankruptcy, reopen the shuttered plant and hire more than 100 workers there.

But negotiations apparently broke down.

Mr. Williamson declined to give details, except to say, "The lender has not been paid in accordance with the schedules. The lender was electing to foreclose on the asset."

The name of the F&E affiliate that owns the Baltimore plant is Baltimore FERST L.P.

The filing, which listed assets of $37.7 million and liabilities of $48.5 million, is complicated by the fact that the compost operating permit, a major asset of the Baltimore plant, is held by the parent company.

"The foreclosure would separate the permit from the physical plant, rendering both the permit and the plant inoperable for future business," Mr. Williamson said.

He added, "The Chapter 11 action seeks to keep the permit in a valid status."

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