Reid Tools Undergoes "Constructive Foreclosure"
August 22, 2011

Reid Tools, based in Coopersville, Mich., is undergoing a constructive foreclosure, according to John Cammenga of White River Enterprises, who currently is running the business as "an agent of the bank."

"A constructive foreclosure … means [the bank is] taking the assets, the owner is surrendering the assets and the hope is that the company can be re-emerged under a new entity under new leadership," says Cammenga , who is overseeing the liquidation of Reid's assets.

The bank placed the company in foreclosure on August 12, and Cammenga's company, White River Enterprises, intends to form a new entity under which Reid will continue.

"All of the employees of the employees, with the exception of the former owner, Mr. [Jeff] Cothery, are continuing with the new entity," says Cammenga.

He adds, "We expect the transition to be complete on September 15."

Cammenga says customers should not see an impact during the foreclosure period.

"That's why I am here right now, before the transaction is complete, to make sure all of the customers are taken care of," he says.

Asked what might have led to the company's downfall, Cammenga advises, "I think there were problems with the economy in general. Other than that, I guess I would have to defer to Jeff Cothery."

Cammenga , whose background is in both mergers and acquisitions and defense contracts, remains optimistic about the future.

"I intend to run the company for the foreseeable future and I am excited about the opportunities in the auto glass business as well as knife-making and serving the cutlery trade," he says.

Cammenga says "most all" creditors will be paid through the process, and that he believes Reid's former owners "agreed to this constructive foreclosure in part to protect the creditors."

Attempts to reach Cothery for comment had been unsuccessful at press time.

Need more info and analysis about the issues?
Subscribe to AGRR Magazine.