Reimbursement Issue Puts Snag In Plan By Cleveland Businessman Allan Jones To Buy Hardwick Clothes

Thursday, April 10, 2014 - by John Wilson

A reimbursement issue has put a snag in plans by Cleveland businessman Allan Jones to buy the financially-ailing Hardwick Clothes.

Current management of the 135-year-old plant at Cleveland, Tn., had agreed to the $2 million offer by Mr. Jones. However, the Pension Benefit Guaranty Corporation filed an objection, and Bankruptcy Judge Shelley Rucker held a lengthy hearing on Thursday morning.

Other issues were worked out, including allowing another month for another bidder to come forward. However, Jones Capital requested $200,000 in reimbursement for its due diligence expenses should another bidder come along with a higher offer.

Judge Rucker agreed to allow $100,000, but said she would not include expenses by the Jones group for an executive search to head the mill.

Attorneys asked for a delay until next Tuesday at 10 a.m. for further discussions. Attorney Jerry Farinash, representing the Jones group, also said he would ask Judge Rucker to reconsider.

An international executive search firm hired by Jones Capital has already come up with three clothing executive finalists, who are due to come to Cleveland next week for interviews.

Thomas Hardwick Hopper, the fifth generation of the Hardwick family to manage the mill, said he and the other two board members, marketing specialist Nancy Deakins and retired Cleveland attorney Charles Corn, had approved the Jones deal.

Mr. Hopper said of Allan Jones, "He's from Cleveland. He has a lot of history here. He is Cleveland's biggest supporter. He has an interest in all things Cleveland."

Mr. Jones, founder of the Check into Cash chain, was at the hearing, but he did not testify.

Mr. Hopper said the company has 220 employees, some of whom were with the firm when it left an old downtown plant to move to a new facility in 1974.

Asked about the workers, he became emotional and paused, finally saying there were "a lot of good people."

Victoria Hardwick, a cousin, also filed an objection, but she did not show up or have a representative. Mr. Hopper said she had earlier asked for company documents and been given them. The company has not paid dividends since 2006. Victoria Hopper has about 1,000 shares of stock.

Mr. Hopper said at one time his cousin "sent a colorful letter to Chambliss Bahner."

Mr. Hopper said a 2011 appraisal of the real estate value of the 40 acres and plant was $3.7 million. He said he did not know the value today.

He said there are few plants left who sew tailored men's clothes. He said he checked with executives of those few firms and they are not interested in purchasing the plant.

Mr. Hopper said if the firm had to liquidate its assets it would likely get little return for its inventory and specialty equipment.

He said it was accountant Tom Decosimo who suggested that Allan Jones might be a possible buyer.

Mr. Hopper said the firm has drawn down $536,000 on a $2 million line of credit and may be up to $700,000 by the time others get a chance to make offers.

Joe Albert Mason, a Jones Capital official, said $132,500 had been spent thus far in checking out the plant, including $76,000 for the search firm, with $46,500 more owed. He said the Jones group might have to wind up paying some $100,000 in severance for the new executive, if he or she accepted the offer and left his or her current firm and then the Jones group did not get the bid.

Mr. Mason said the building needs repairs, including a new roof. "I have seen several buckets collecting rainwater," he said.

He said Mr. Jones envisions "getting the business back to what it was 10-15 years ago with triple the revenues and with retaining the jobs."

The deal requires all the current employees to reapply, but Mr. Mason said it is expected that most would be retained.

He said the Jones group wants to keep the plant going with little or no period of a shutdown.  

Attorney Farinash said the Jones group has some $68,000 in legal fees thus far. Bruce Bailey, representing Hardwick Clothes, has filed for $109,463.54 plus $1,664.54 in expenses and Tom Decosimo for $17,387.50 and $39.55 expenses.


Anturaum Dickey, 36, Arrested For Federal Warrants In Cleveland

Anturaum Montazz Dickey, 36, of Cleveland was taken into custody on federal warrants at a Blount Avenue residence by members of the Bradley County Sheriff’s Office’s Fugitive Team, backed up by deputies from BCSO, on a tip provided by members of the United States Marshal’s Service.   An additional charge has been filed on Dickey for possessing a Serbian AK-47 style rifle, ... (click for more)

Local Religious Group Condemns Hammond Comments, Asks Apology

A local religious group, Mercy Junction and Peace Center, has condemned comments by Sheriff Jim Hammond on Muslims and asked for an apology. The group said, " People of all faiths, or of no faith, are invited to join Mercy Junction in front of the Islamic Society of Chattanooga for prayers on Friday afternoon. "Prayers In Solidarity" will take place outside the Islamic ... (click for more)

Who's Responsible For East Ridge's Stadium? - And Response

There just can be no excuse for East Ridge High School's stadium being in such dangerous condition that it has been condemned.   Where is responsible for this? I know there are a few other stadiums like this as well. And there is no excuse for this.  Building new and beautiful schools, state of the art technology. Top athletic facilities as well. Yet, East Ridge ... (click for more)

Roy Exum: The Barners Trounce Who?

There is a website known as Grammarly that just completed a profound study. An automated proof-reading company (who I hope never finds out about me) collected 100 comments that each included over 50 words from the comment blogs of the nation’s preseason Top 25 college football teams. Then they fed them into the company’s huge algorithm computer and checked each fan base for punctuation, ... (click for more)

East Ridge Football: Home Side Stands Are Closed ... Four Home Games Will Be Played on Campus

The home side football stands and press box at East Ridge High School are closed permanently due to safety issues, but for the 66 teenagers who wear the orange, white and gray for the Pioneers on Friday nights it’s a small distraction and the season continues. “Playing this Friday’s game against Signal Mountain at Baylor (7:30 p.m.) is a small distraction for us, but we know ... (click for more)

Signal Mountain Sweeps Red Bank In Volleyball

Signal Mountain coach Jennifer Redman was not a very happy young lady last week when Notre Dame came up and took a 3-1 volleyball win in the Lady Eagles' gym. She knows she has an experienced team with more than her share of talent, but they just hadn't been playing like it to start the season. The veteran coach was somewhat happier Wednesday night after her team took a non-district ... (click for more)