Saturday, August 19, 2000

Cordage Co. gets restraining order


Millcraft can't hire its workers

By Mike Boyer
The Cincinnati Enquirer

        In an unusual move, Cincinnati Cordage & Paper Co., which sought Chapter 11 bankruptcy reorganization Aug. 1, obtained a temporary restraining order this week against a competitor and former suitor to prevent it from hiring its employees or using its confidential business information.

        The order signed by Bankruptcy Court Judge Jeffrey Hopkins prevents Cleveland-based Millcraft Paper Co. from hiring additional Cincinnati Cordage employees and requires it return information about Cincinnati Cordage's business obtained during unsuccessful sale talks this summer.

        Cincinnati Cordage sought the order, slated for a full hearing on Thursday, after Millcraft hired about 20 employees from its offices in Pittsburgh, Dayton and Indianapolis.

        The restraining order also requires the former Cordage employees hired by Millcraft to turn over any information they have about the company's customers.

        “Defendants' use of the debtor trade secrets and confidential information will cause immediate and irreparable injury to the debtor unless those actions are enjoined,” Cincinnati Cordage argued in court papers.

        “In my 35 years of bankruptcy practice, I've never seen a raid of employees of a Chapter 11 debtor,” said Edmund Adams of Frost & Jacobs, Cincinnati Cordage's bankruptcy attorney.

        Mark Wallach, attorney for Millcraft, denied the company was soliciting Cord age employees or using any information from the failed negotiations.

        “Cordage employees are pretty nervous” because of the company's bankruptcy filing and independently sought jobs from Millcraft, he said.

        “My investigation shows that none of the employees that left Cordage for Millcraft went because they were solicited by Millcraft,” he said.

        The 108-year-old Cincinnati paper distributor sought protection from creditors in the face of cash-flow crisis. The company employed about 200 in nine Midwest locations, including Cincinnati.

        Cincinnati Cordage, which listed assets of $32.8 million and debts of $34 million, is attempting to either work out a repayment plan with creditors or a sale of the business, Mr. Adams said.

       



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