Pitching-In: Barton-Cotton back up and running.
Roughly 40 employees of the Columbia, Md., firm were back working, many of them unpaid, to get clients' fundraising appeals in the mail.
Larry Vogel, vice president of operations for Barton-Cotton went to the office on February 10, the day after American Capital shut the company down. His goal, he said, was to keep the business going by convincing the Bankruptcy Trustee that Barton-Cotton had more value as an ongoing business.
"We were fortunate to be assigned a trustee, Mark Friedman of DLA Piper, who recognized that Barton-Cotton was definitely a viable ongoing business,' said Vogel.
Barton-Cotton filed for Chapter 7 bankruptcy in United States Bankruptcy Court for the District of Maryland. The firm filed liquidation paperwork on four companies: Barton-Cotton Inc., Barton-Cotton Sales Corp., Barton-Cotton Holding Corp., and Barton-Cotton Real Estate Inc. The law firm DLA Piper in Baltimore is the court-appointed trustee in the case. Venable LLP, also in Baltimore, filed the petitions for Barton-Cotton.
The NonProfit Times broke the bankruptcy story on February 9 on nptimes.com after obtaining a copy of a letter sent to at least some of Barton-Cotton's creditors by the Bank of Montreal in Chicago. The letter notifies the recipient that the bank is "a secured creditor of the Debtor," which it identities as Barton-Cotton, Incorporated. The bank identifies itself as "Agent."
According to the bank's letter, "the Debtor has defaulted on the obligations the Debtor owes to Agent. Agent is therefore entitled to collect all outstanding accounts receivable, general intangibles, rights to payment, and contract rights of the Debtor."
The filing for Barton-Cotton Inc. reported assets of less than $50 million and liabilities between $50 million and $100 million. Barton-Cotton Holding Corp. and Barton-Cotton Sales Corp. both reported less than $50,000 in assets and liabilities of from $50 million to $100 million. Barton-Cotton Real Estate Inc. reported assets of less than $10 million and liabilities between $100 million and $500 million.
According to Friedman, there are five bidders for various parts of Barton-Cotton and one prime bidder for the fundraising operations. The catalog and holiday cards divisions are expected to be sold to separate bidders, he said. Friedman declined to identify the bidders.
Within a few days of the "closing," Barton-Cotton was working on a 400,000-piece mailing for National Wildlife Federation (NWF). "With the support of David Strauss at NWF we completed the order and the program dropped into the mail," said Jen Harker director, Creative Services, for Barton-Cotton.
Now, three weeks later, Barton Cotton is working with clients and suppliers to complete more than 50 mailings, said Vogel. That includes an 85,000 piece mailing for American Legion of Pennsylvania, a 1 million piece mailing for Missionary Oblates of Mary Immaculate and a very mailing for The Cancer Research Society of Canada.
"In a Chapter 7 Bankruptcy there is usually no ongoing business because there are no funds to support it. But we're in business because of our people and our long-term relationships with clients and suppliers," said Vogel. Among those firms helping out, he said, are EU Service and Mailbag.
Friedman said the lender group is allowing the work to continue and weekly paychecks are being issued to many of the workers.
Vogel said, "Barton Cotton employees are frustrated that we cannot address every issue and realize that our clients have questions. We're adding staff daily and are working to clear up all existing concerns. Our goal is to fulfill every one of our obligations in 2009."