Goss Goes Back To Bankruptcy Court

By: Jim Rosenberg Goss is going bust -- again. But if Goss Graphic Systems' lenders become owners, they stand ready to advance the ailing press maker up to $90 million.

Goss announced it will eliminate roughly $290 million in secured bank and unsecured bond debt, with bankers and bondholders becoming majority owners of the company, restructured and renamed Goss International. Doing so, it said, requires reorganization under Chapter 11 of the U.S. Bankruptcy Code, its second in two years, for which it filed a pre-arranged plan this month with the support of owners, lenders, and bondholders.

The filing also seeks approval of a new, $90-million lending facility from some existing lenders, including "up to $48 million of liquidity for working capital requirements and letters of credit."

Goss manufactures only overseas since it closed its Cedar Rapids, Iowa, plant Aug. 31, when it also laid off 20% of its administrative staff in Westmont, Ill. The petition for Chapter 11 protection covers only the U.S. company. Goss has remained competitive in European and Asian markets, especially in sales of its Universal single-wide models. It claims 30% market share, 80% of that outside the Americas.

Meanwhile, the customer that kept Goss in the domestic double-wide press-replacement business and whose contract revision helped keep Goss in business at all, was caught between the plant closure in the Midwest and terrorism from the Middle East that effectively ended operations at its Manhattan production plant.

New York Post Production Director David W. O'Neill had to send four trucks to the press manufacturer's Cedar Rapids assembly plant to retrieve an angle-bar nest and the C and D levels of three towers. Those remaining sections of the fourth and last press line in a new plant the paper brought into operation this year have been stored in a warehouse in Mahwah, N.J., since Sept. 14, said O'Neill.

According to O'Neill, Goss permitted the Post to pick up the press sections provided it assumed all possible liabilities. But even with the sections, the last press line still had to be erected, and Goss owed the mechanical and electrical contractors "a significant amount of money," said O'Neill.

George R. Hall Contracting and its Florida subsidiary, T.W. Davis, said O'Neill, "have pulled off our project completely" and have sought a lien on the Post's equipment. "They are looking for whoever they can drag into this to get their money," said O'Neill. He said the Post paid Goss for both the equipment and its installation.

H. William Moore, president and CEO of Hall, would only acknowledge "problems" arising from work for Goss. Based close to Cleveland (where, as The Plain Dealer's operations director, he earlier was responsible for Goss' premier Colorliner site), Moore said he would not discuss relations with Goss or customers before consulting with company lawyers.

O'Neill wondered if the Post would have to hire its own crew to finish the press installation. If it does, the project will require what he called a "mini-revitalization" because Hall moved all its equipment to other jobs. Even unloading the trucks will be delayed until preparation is made to skate the heavy equipment into the plant.

The Post's South Street plant lost steam, electricity, and access, after the Sept. 11 terrorist attacks in lower Manhattan. "The thing was just like a dead whale," said O'Neill, who guessed that production may never return to the 75-year-old building that once housed Hearst's Journal-American. The paper was forced to rely entirely on three working "Postliner" presses at its new plant in the Bronx, where it printed 1,125,000 copies of the Sept. 12 issue in the course of a 10-hour press run.

As Goss seeks bankruptcy protection, the Post is "still sorting things out" from a legal standpoint, said Finance Vice President Michael Carvalhido. "We have not made a determination."

All attempts to speak with Goss executives in person or by telephone -- including occasions suggested by Goss following Nexpo in June and at Print 01 this month -- were unsuccessful. Spokesman David Stamp said Goss headquarters "will definitely remain in Chicago" and the company expects to emerge from Chapter 11 next spring.

Goss recalled workers to help close the Cedar Rapids plant, but only two accepted, according to Joe Ironside, business representative for the machinists' union. Stamp would not comment on the matter. Some former workers accused Goss of closing shop in the United States to concentrate on a joint venture in Shanghai, China, where it is the majority partner.