By FOSS FARRAR, Traveler Staff Writer
A counter-offer by Union State Bank to a potential buyer of Central Plains Book Manufacturing is unacceptable, the potential Wichita buyer said Friday.
Jeff Johnson, owner of Color Impressions, a Wichita printing company, confirmed a report that Union State Bank had offered a 10-year, $1 million loan for the purchase.
Union State is the largest secured creditor of Central Plains in a bankruptcy case.
Johnson said he remains interested in buying Central Plains Book Manufacturing but that he wants a deal to come together quickly. Johnson would form a separate LLC if he were to buy the company, with a partner, Tom Galbraith, also of Wichita.
"Time is of the essence," he said. "Every day that (Central Plains Book Manufacturing is) closed, you lose value on your company."
Central Plains Book Manufacturing ceased operations and laid off its 70 workers on Aug. 1, two days after the Strother Field company filed for Chapter 11. The case was filed in the U.S. Bankruptcy Court, District of Kansas, in Wichita.
Union State Bank was trying to set up a conference call with the prospective buyer, Justin Sparks, vice president and chief loan officer of the bank, said late Friday.
"Nothing is imminent," Sparks said of a potential deal to sell the company. "I'm not optimistic, but I'm not pessimistic."
Sparks and Johnson acknowledged that other parties in the bankruptcy case must be satisfied for any deal to go through. One of them is the Internal Revenue Service, which holds a $300,000 lien on Central Plains assets for back taxes.
"The IRS has first lien on cash and receivables," said Ed Nazar, who is representing Central Plains in the bankruptcy. "The bank has a lien on personal property and equipment."
Others that must agree to any deal are the Small Business Administration and a state agency that provided funding to Central Plains, Nazar said.
Getting all these entities together on a deal is like getting satellites aligned in space, he said. "They come together and they drift apart," he said.
Nazar said he believes Union State is working diligently to try to make a deal but the bank "needs to run the traps with its constituency, the SBA and the state."
"We need patience and something can come through," he said.
Johnson indicated he is starting to run out of patience. He said he made his first offer to buy Central Plains on Aug. 9, and it took the bank until Friday to respond.
"Every day is a new day in this business," he said. "You have to keep the customers coming in and the sales coming in and the books going out. Every day that you're closed, you lose value on your company."
Johnson said he "knows for a fact" that several former Central Plains employees have taken other jobs.
"In order for me to resurrect the business and equipment, it's going to be tough," he said. "It's fast becoming less and less valuable."
Gunter Hansen, the general manager of Central Plains Book Manufacturing, said Friday he holds out hope that a deal on the sale can be made, for the sake of the company's 70 employees.
Including the years in business of Gilliland Printing in Arkansas City -- a predecessor of Central Plains Book Maufacturing -- Cowley County has had "60 years of book manufacturing; it should not come to a close," Hansen said.
