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Bankruptcy Filing for Milwaukee Forge

Feb. 22, 2010
Unidentified buyer said ready to takeover, without debt obligations
Milwaukee Forge has filed a claim for creditor protection, apparently hoping to be sold to a waiting buyer. The identity of the buyer is not known, and the company is expected to continue operations throughout the reorganization. The company’s total assets and liabilities are not known, though its total pension liability is said to be $10.1 million and other retirement benefits reportedly amount to $1.8 million in other retirement benefits. The petition was filed in Milwaukee County Circuit Court seeking protection under Wisconsin’s Chapter 128, a classification that is described as similar to Chapter 11 of the U.S. Bankruptcy Code, though its procedures for transferring company ownership are considered less time consuming than the federal standard. Milwaukee Forge is a 97-year-old company that produces hammer and closed-die forgings and rolled rings in a range of sizes and steel grades. It also performs heat treating. Its customers are manufacturers of agricultural, construction, mining, and off-highway equipment. Company president and CEO Dave Mesick called the filing a “strategic business move” to position the nearly 100-year-old company for new growth. The state court appointed a receiver, and Milwaukee Forge has arranged financing to fund its operations during the transition to new ownership. Mesick told the The Business Journal of Milwaukee, “It’s business as usual and all jobs will remain in place throughout the court process.” A Milwaukee Forge representative stressed that there will be no plant closing and the 106 workers will remain with the operation under the new ownership. However, the Chapter 128 process reportedly will require the current company to discontinue business activities in advance of an asset sale. A new buyer would not be obligated to assume Milwaukee Forge's liabilities, which include pension and benefit obligations.