December 15, 2008

BY FRANCINE KNOWLES AND SANDRA GUY fknowles (at) suntimes.com sguy (at) suntimes.com

Republic Windows and Doors filed for Chapter 7 bankruptcy Monday, the company said.

The bankruptcy filing for liquidation was a requirement of Bank of America in the negotiated settlement with the United Electrical, Radio and Machine Workers of America, Republic said.

Protesters picket a Bank of America branch last week on Chicago's West Side saying they support union workers staging a sit-in at their former factory.

Republic Chief Executive Officer Richard Gillman blamed declining home sales, the credit debacle, and "the lack of cooperation from Bank of America."

Court supervision "was appropriate and necessary to assist us in recovering on our collateral after employee issues were addressed," said bank spokeswoman Julie Westermann. "Republic had lost $10 million the past two years and had maxed out on its $5 million line of credit."

Republic made headlines last week after the plant closed when Bank of America, concerned about the company's financial viability, refused to extend it additional credit. That left 240 workers without a job -- workers who were not given the legally required 60 days' notice of a layoff.

The workers successfully staged a protest against Bank of America to demand severance and vacation pay and challenge the lack of proper notice. Politicians and union leaders blasted Bank of America's action, given that it took $15 billion in the federal bank bailout package. Bank of America ultimately agreed to provide $1.35 million in lending for Republic's layoff package.

Westermann said Monday that while the bank recognized it wasn't its responsibility to pay Republic's workers, it provided the loan to enable Gillman "to do what was right."

She added the bank started talking to Gillman about winding down operations in July. That would have enabled him to give earlier notice to workers.

Gillman and a company adviser on Friday contended Republic had investors lined up to pay cash for the assets of Orrville, Ohio-based American Water Seal, with $15 million in sales, and that would have boosted Republic's sales to roughly $55 million and allowed it to turn a roughly $3.5 million profit, and save the 240 jobs. But Bank of America, a lender to AWS, decided to liquidate the company, they said.

Westermann said all of Gillman's proposals "involved a second line of credit, which we could not responsibly give him considering the state of his company."

Gillman has no plans to reopen the Goose Island plant, he said last week. But his family does plan to focus on its nonunion, Iowa-based Echo Windows. That company, which employs about 100 people, was created through the Gillman's family's recent purchase of a division of window maker TRACO.

"We're going to try and grow the business as much as we can," Gillman said.