Guilford plant owner files for Chapter 11


By Jim Poole

The owner of the former Guilford Mills plant in Cobleskill filed for Chapter 11 reorganization to avoid having Schoharie County take over the plant for unpaid taxes.
The filing in US Bankruptcy Court in Albany came last Monday, two days before the deadline to pay $1.3 million in back taxes.
But despite the filing, the county Economic Developer and company representatives believe the 485,000-square-foot plant, vacant for more than six years, remains attractive to potential tenants.
County Treasurer Bill Cherry started foreclosure proceedings last year to force Cobleskill Business Partner LLC to pay. He did so partly because the $1.3 million represents almost nine percent of the total county tax levy.
Mr. Cherry met several times with company reps in February and March to set up a payment schedule on the back taxes, and he was optimistic.
So last Monday’s filing came as a complete surprise.
“There was no mention of any insolvency,” he said. “I’m insulted, to be honest.”
Mike Tersigni, who’s handling the property for the Pinnacle Realty Group, said the owner had “no choice but to go forward to the federal government for protection” against the foreclosure.
“We’re hoping to get refinancing and reorganized,” Mr. Tersigni said. “We’ll get out of it.”
He also said Cobleskill Business Park believes the plantsproperty assessment is too high.
Cobleskill Assessor Alan Danforth said officials lowered the assessment from about $7.8 million to about $5.75 million in June, 2004.
That was the agreement when Philip Rahaim Sr.––the sole principal of Cobleskill Business Park––bought the plant.
“It was lowered, but not that much,” Mr. Tersigni said.
But Mr. Danforth believed a $2 million reduction was considerable, as did Mr. Cherry.
“They agreed to that over three years ago,” Mr. Cherry said. “If they thought it was too high, why did they wait until two days before the deadline?”
County Economic Developer Jody Zakrevsky said he’s unsure how the filing will affect a search for tenants but added that interest in the plant has been high.
Part of that increased interest comes because the former mill is an Empire Zone, and part is because Pinnacle is making “a much stronger marketing effort,” Mr. Zakrevsky said.
Mr. Tersigni agreed, adding that Mr. Rahaim cleaned and improved much of the plant.
Pinnacle has shown the property nine times, and two companies are particularly interested in it, Mr. Tersigni said.
Two site-selection companies, which find sites for businesses, are also interested, Mr. Zakrevsky added.
“It shows well,” Mr. Tersigni said. “As much as there are negatives [with the back taxes and filing], there are still a lot of positives.”
But Mr. Cherry believes the reorganization filing is nothing more than a tactic to avoid foreclosure.
“They don’t care about Schoharie County,” he said. “To them, we’re just a pushpin on a map.”
Assuming the filing is grounded in the high assessment, Mr. Cherry believes the bankruptcy judge will toss the case out.
He plans to advise county officials to hire an attorney who’s an expert in bankruptcy to fight the filing in court.