Scovill Fasteners will lack funds to pay retirees after sale closing

By Caroline Salls

Pittsburgh, June 14 - Scovill Fasteners, Inc. requested court approval to terminate the benefits for retired employees when it closes the sale of substantially all of its assets, according to a Monday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.

The company said it will no longer have ongoing operations to generate cash or the ability to borrow under its post-bankruptcy financing after the sale closes.

Because its assets are fully encumbered by pre-bankruptcy and post-bankruptcy lenders, Scovill said its estates will have no funds available to pay the retiree benefits.

If it cannot terminate the retiree benefits, the company said it will be forced to convert its bankruptcy case to Chapter 7.

A hearing is scheduled for June 29.

Scovill, a Clarksville, Ga.-based maker of snap-closure buttons for consumer and military clothing, filed for bankruptcy on April 19. The Chapter 11 case number is 11-21650.

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