A Charlotte steel fabrication company that was a major creditor of bankrupt Charlotte bus maker DesignLine will be auctioning off lasers and other equipment next week as part of its own Chapter 11 bankruptcy.
Metrolina Steel Inc., which filed for bankruptcy a day before DesignLine’s Aug. 15 petition, was owed more than $181,000 by the manufacturer of hybrid buses, according to a court filing.
Metrolina, a closely held company founded in 1977, suffered diminished revenues due to the downturn in the U.S. economy, according to a court filing. The bankruptcy filing came after decreased cashflow and the loss of a “key customer” left Metrolina unable to meet its debt and lease payments, according to the documents.
The company had assets of $1.9 million and liabilities of $3.6 million, according to a filing in August.
Metrolina had been making bus frames for DesignLine, said Mike Stewart, vice president of sales at Asset Sales Inc., an Indian Trail-based company that runs industrial auctions in the U.S., Canada and the United Kingdom. A skeleton from a bus remains at the Metrolina facility on Westinghouse Boulevard, he said.
The auction company is expecting 200 to 300 bidders to vie for three lasers, large metal sheers and other high-end metal fabrication equipment in an auction to be held next Thursday onsite and on the Internet, Stewart said. The auction could bring in more than $1 million, he said.
Metrolina’s bankruptcy reorganization plan, approved this month by U.S. Bankruptcy Judge Laura Beyer, outlines plans to pay creditors and to cancel the stock held by shareholders. Metrolina executives and an attorney representing the company in bankruptcy could not be reached for comment.
DesignLine, which sold hybrid buses designed to use less fuel, filed for bankruptcy in August after its financing dried up. The company had attracted high-profile investors in Charlotte and once employed former Charlotte Mayor Anthony Foxx, who is now U.S. Transportation Secretary.
A California-based investment group agreed to buy the company last month, and its president has said the group plans to restart operations after new contracts are negotiated with customers. The Observer has reported that the FBI has investigated DesignLine over the installation of used parts in new buses.
The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.
Have a news tip? You can send it to a local news editor; email firstname.lastname@example.org to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.Read moreRead less