Associated Press
NORTHFIELD, Minn. -- Sheldahl Inc. says a bankruptcy judge has approved an agreement that will allow the company to continue operations under new ownership.
Under the agreement, announced Monday, Sheldahl will sell its continuing business assets to three of its largest shareholders for about $20 million and use the proceeds to pay off its largest creditor, Wells Fargo, which is owed $16.5 million.
The assets are being sold to Ampersand Ventures, Molex Inc. and Morgenthaler.
Sheldahl filed for bankruptcy protection May 30, listing liabilities of $82 million.
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The deal saves the jobs of 410 people who work at Sheldahl headquarters in Northfield. The company makes flexible printed circuits used in cars and cell phones. But the agreement also calls for closing Sheldahl's plant in Longmont, Colo., in about 30 days. Most of that plant's equipment will go to Northfield.
The Colorado plant employed 22 or 23 people as of Aug. 1, and all have received layoff notices, said Benoit Pouliquen, president and chief executive officer. The plant is already down to very limited operations and will shut down within 10 days, and only three or four employees will stay on to disassemble equipment and ship it to Northfield, he said Tuesday.
Sheldahl also will pay about $2.5 million to other lien holders. Unsecured creditors, who are owed about $14 million, will share a payment of $927,000, plus at least another $1 million that would come from the sale of the Longmont plant.
The buyers will forgive secured debt of about $14 million and unsecured debt of about $11 million. Shareholders will get nothing.
Sheldahl made big missteps in recent years by attempting to diversify into semiconductor packaging, investing tens of millions of dollars in the Longmont facility.
The company said it will retreat to its core business of making circuitry for the automotive, electronics and data communications industries.
