Deadline extended for tannery sale

HARTLAND – Though they voted overwhelmingly in support of the deal, employees at bankrupt Irving Tanning Co. will have to wait another month to find out if the proposed sale of their employer to Meriturn Partners LLC will receive final approval in U.S. Bankruptcy Court.

U.S. Bankruptcy Judge Louis Kornreich on Friday granted Irving permission to spend money through the end of next month so the company can keep operating while the proposed sale is being completed, according to documents filed in bankruptcy court. TD Banknorth, Irving’s chief creditor, agreed to let Irving spend the bank’s cash collateral through Aug. 31.

Parties involved in the proposed sale had expected to receive final approval on Friday for the deal in bankruptcy court.

Earlier this month, Maine Department of Economic and Community Development gave Irving a $250,000 loan so the company could keep operating while final details of the sale are worked out.

Meriturn, an investment firm that specializes in restructuring troubled middle-market companies, for the past couple of months has sought to purchase Irving Tanning after the company’s filing for Chapter 11 bankruptcy in March. Meriturn’s main offices are in San Francisco and Raleigh, N.C.

Last week, Irving employees cast ballots on whether to approve the proposed sale. Of the 161 employee ballots cast, only two opposed allowing Meriturn to purchase the tannery, according to court documents.

In court on Friday, attorneys for Irving agreed that if the company could not pay $3.75 million to TD Banknorth by the end of the day, it would pay $100,000 to the bank within the same deadline. The $100,000 would not count toward the $3.75 million expected to be paid to the bank when the bankruptcy sale is completed.

Court documents indicate that other conditions of the proposed sale are expected to include:

. Transfer of ownership of two landfills from the company to the town of Hartland.

. Full payment of taxes and debts that Irving owes the town.

. Reduction in the payments the tannery makes each year toward the operating costs of one of the landfills and the town’s wastewater treatment plant.

. Establishment of a land trust to help settle any environmental claims against Irving.

Meriturn also has said it will honor vacation and compensation benefits accrued by the tannery’s employees.

Attempts Friday to contact Michael Fagone, a Portland attorney representing Irving in the bankruptcy, and Franklin Staley, a director of Meriturn Partners, were unsuccessful.