Global Fastener News

General Electric Buys Questron in Bankruptcy Auction; No Proceeds for Stockholders

John Wolz

General Electric Company�s GE Supply business unit won the bankruptcy court auction to acquire Questron Technology Inc.
The $89.2 million purchase price will be insufficient to cover all of the fastener distributor�s liabilities and therefore Questron’s stockholders will not receive any money.
The U.S. Bankruptcy Court in Delaware approved the cash and deferred payments bid as the highest and best offer. Completion of the sale is subject to certain customary closing conditions and is expected to close on or about May 5, 2002.
Under the agreement GE Supply will pay $86.7 million in cash upon closing, will assume certain leases, customer contracts and other agreements and will fund up to $500,000 for administrative expenses of Questron’s bankruptcy proceedings.
GE Supply will offer employment to all Questron employees and provide them with comparable benefits. GE will not assume any other Questron liabilities.
GE Supply also agreed to make certain additional payments, dependent in part upon the operating results of the acquired business up to $2 million in the aggregate, with $666,667 of this amount guaranteed.
“We view this sale as a very favorable development for Questron, its customers, suppliers and employees,” Questron CEO Dominic Polimeni said.
The proceeds of the sale will be used to pay liabilities and discharge claims in accordance with the Bankruptcy Code, including the payment of a $2.5 million fee to QTI Acquisition Corp. in order to terminate their previously announced assets sale agreement with Questron and its subsidiaries.
Questron and its subsidiaries filed for Chapter 11 bankruptcy reorganization on February 3, 2002.
Questron provides supply chain management and inventory logistics management for small parts commonly referred to as “C” inventory items for OEMs. Web: questrontechnology.com. �2002 FastenerNews.com