Hartmarx Workers Threaten Sit In to Protest Possible Liquidation
The saga of the Hartmarx bankruptcy continues. The main lender, Wells Fargo, is pushing for a liquidation of the company and the union is now threatening a sit in to protest the loss of their jobs. Illinois lawmakers want Wells Fargo to allow the sale of the company to a firm that will keep the company open and are threatening to stop doing business with the bank if it does not comply.
A group of 500 Hart Schaffner Marx workers held a rally at the brand's factory near Chicago on Monday and voted to stage a sit-in if Wells Fargo-Wachovia or a potential buyer tries to begin liquidating its parent, the bankrupt Hartmarx Corp.
The workers were joined by lawmakers and union and state leaders in a bid to pressure Wells Fargo, which controls $100 million of Hartmarx's $160 million debtor-in-possession credit line, to allow the company to stay afloat and give bidders a chance to purchase the historic men's clothing firm, which outfitted President Obama throughout his election and the inauguration.
*****
But Wells Fargo shot back Monday......
"Unfortunately, Hartmarx has been in default of its loan obligations to banks in the group that have [sic] provided it credit, including Wachovia Capital Finance, part of Wells Fargo," the statement continued. "Nevertheless, we have continued to finance the operations of Hartmarx, both before and after the Chapter 11 filing, even though it is now apparent that Hartmarx is unable to repay more than $114 million, which it owes the bank group."
Rep. Phil Hare (D., Ill.), who for 13 years worked as a cutter in a Hart Shaffner Marx factory in the district he now represents, implored Wells Fargo, "At this point, we are not even asking you to extend the line of credit Hartmarx so desperately needs. All we're asking is for you to keep this great company in business. You have the power to do that. Accept a bid that will keep Hartmarx intact and save thousands of jobs. Allow these workers to continue supporting their families. American taxpayers bailed you out in your time of need. It is time to return the favor."
Illinois State Treasurer Alexi Giannoulias flat out told the bank: "Unless the company remains open, [Wells Fargo] will not be doing business with the state of Illinois any longer." It's become quite an emotional issue locally. Wells Fargo's position is that it can't loan businesses money that can't pay it back, and the workers' position is that the government bailed out Wells Fargo with taxpayer money and now it needs to help struggling companies.
This case is being watched closely because it could affect other similar bankruptcy situations in which a bailed out bank wants to foreclose on a company in chapter 11.
