HomeMy WebLinkAbout11-21-1988 Council Minutes
450
A special meeting of the Canton City Council was held on
November 21, 1988 in Council Chambers.
PLEDGE OF ALLEGIANCE OPENED THE MEETING FOLLOWED BY THE
INVOCATION GIVEN BY CITY CLERK NANCY WHITES.
Mayor Edwards asked for roll call at 6:30 p.m. Present:
Aldermen Kovachevich, Zilly, Steck, Sarff, Meade, Bohler,
May, Chapman. Absent: None.
PURPOSE OF THE MEETING: Read by the city clerk as follows:
To consider whether the terms and conditions of Resolution
No. 2042 have been met; to take final action with respect
to the sale and transfer of the Liza Foley/CIC stock; and,
to take such other and further action in the premises as
may seem in the best interest of the City of Canton.
Mayor Edwards said he appreciated and understood why the
large audience is attending this meeting, as most of the
audience was CIC employees.
Nelson Carlo of Abbott Products presented his background
and ideas for CIC. Nelson said he is the owner of Abbott
Products, which is of government nature, particularly defense
contracts with the Department of Defense and the U.S. Army.
Abbott Industrial Supply was then incorporated expanding
the already ample capabilities of the group. The company
today is a full stocking distributor of nationally known
manufacturers of industrial supplies and specialty products.
Nelson Carlo said he wants to come here because there are
hard-working people, a large plant with a lot of capacity
that's being under utilized and capabilities that are
unlimited.
CIC will stay a separate company from other Abbott firms
and that turning CIC in to a viable firm is my adrenalin,
my energy. You can't imagine how desperately I want to
come to Canton and operate that business. I'm putting
my own money in here. I'm not a consultant. I'm a business
person.
Equipment, employees, and local management at the Canton
plant would remain under his ownership. He would bring
in Jesse Walden from his firm who would serve as vice
president and general manager at CIC. Local management
of Larry Krulac, vice president of manufacturing, would
remain.
Shareholders in CIC will recapture their losses and be
a part of a very successful enterprise, and local
representatives could serve on the CIC Board of Directors
or an advisory board to the CIC Board.
City approval of the stock sale would mean he could have
additional work at the plant within 30 days and increase
the 200 employee work force at CIC to 300 within a year.
He expects the local plant to eventually have 500 to 600
employees working on government and private sector
manufacturing contracts. My firms currently have a backlog
of federal manufacturing work that totals $12 million and
the backlog has never been lower than $10 million.
Also speaking was Shawn 0'Donnell, representative of the
business development firm, Companies Organized to Respond
Effectively.
Shawn 0'Donnell proposed the City maintain its ownership
of CIC stock and allow CORE to form a five-member trustee
board to oversee management. Offer his firm an option
to eventually purchase 100 percent of the city's CIC stock
which could eventually be sold to local employees and
management who would then own the company.
451
CONTINUED November 21, 1988
Nelson Carlo said he had $250,000 ready to invest in CIC,
and that employees would have work to do. I have an open
line of credit.
Shawn O'Donnell declined to reveal the amount of money
he was willing to invest in the plant, his firm works on
behalf of others, with managers, employees, or the people
of Fulton County, and that he deals exclusively with the
transfer of ownership of plants ready to close or change
owners.
He suggested a three-year option for the purchase of the
Foley stock and proposed an Employee Stock Ownership Plan
within that three years. He proposed the council wait
three weeks until he could bring in representatives of
three unnamed firms interested in using the local plant.
O Jim Malmgren City Attorney requested permission to speak
~ to members of the council in executive session.
~ Motion by Alderman Zilly, second by Alderman Kovachevich,
= to go into executive session. Voice vote, motion carried.
m Council recessed at 7:31 p.m.
a Council reconvened at 7:47 p.m. •
Nelson Carlo told the council that he would continue to
pay on the RDLF loan and would attempt to have the federal
government forgive the loan.
Nelson said if he is approved he would bring work to the
CIC plant within the next 30 days. We can get government
work that others can't. I intend to build the company
up right here in Canton.
Nelson Carlo pledged he would not merge CIC with any of
his other Companies and that all minor stockholders would
not be frozen out, but would see the value of their stock
rebound.
Shawn O'Donnell was unwilling to discuss in public how
much his firm, or firms he represented, might invest in
CIC, and also refused to name any of the firms and
manufacturers he represented. He would only reveal the
names in closed session.
Motion by Alderman Steck, second by Alderman Bohler, to
go into executive session to hold discussions with Shawn
0'Donnell of CORE. Voice vote, motion carried.
Council went into executive session at 8:06 p.m.
Council reconvened at 8:42 p.m.
Mayor Edwards said he was recommending we go with Nelson
Carlo. Mayor Edwards said Shawn 0'Donnell presented a
consultant's view.
Nelson Carlo has had input on a CIC reorganization plan
filed with the federal bankruptcy court and will likely
file an amended plan to the firm's Chapter 11 bankruptcy
case; will maintain the Foley agreement in regard to leaving
the stock with the city as colleteral on the prior loan; ,
and will make payments on a second loan of $400,000 the
city had received from the federal government and loaned
to CIC.
452
CONTINUED November 21, 1988
Nelson Carlo said he had $250,000 ready to invest in CIC,
and that employees would have work to do. I have an open
line of aredit.
Shawn O'Donnell declined to reveal the amount of money
he was willing to invest in the plant, his firm works on
behalf of others, either managers, employees or the people
of Fulton County, and that he deals exclusively with the
transfer of ownership of plants ready to close or change
owners.
He suggested a three-year option for the purchase of the
Foley Stock and proposed an Employee Stock Ownership Plan
within that three years. He proposed the council wait
three weeks until he could bring in representatives of
three unnamed firms interested in using the local plant.
Jim Malmgren requested permission to speak to council in
executive session.
Motion by Alderman Zilly, second by Alderman Kovachevich,
to go into executive session. Voice vote, motion carried.
Council recessed at 7:31 p.m.
Executive session reconvened at 7:47 p.m.
Nelson Carlo told the council that he would continue to
pay on the RDLF loan and would attempt to have the federal
government forgive the loan. Nelson said if he is approved
tonight to purchase Foley stock he would bring work to
the CIC plant within the next 30 days. We can get government
work that others can't. I intend to build the company
up, right here in Canton.
Nelson Carlo pledged he would not merge CIC with any of
his other companies and that all minor stock holders would
not be frozen out but would see the value of their stock
rebound.
Shawn 0'Donnell was unwilling to discuss in public how
much his firm or firms he represented, might invest in
CIC, and also refused to name any of the firms and
manufactures he represented. He would only reveal the
names in closed session.
Motion by Alderman Steck, second by Alderman Bohler, to
go into executive session for discusion with Shawn O'Donnell
of CORE. Voice vote, motion carried.
Council went into executive session at 8:06 p.m.
Council reconvened at 8:42 p.m.
Mayor Edwards said he was recommending we go with Nelson
Carlo. Mayor Edwards said Shawn 0'Donnell presented a
consultant's view.
Nelson Carlo has had input on a CIC reorganization plan
filed with the federal bankruptcy court and will likely
file an amended plan to the firm's Chapter 11 bankruptcy
case; that Mr. Carlo will maintain the Foley agreement
in regard to leaving the stock with the City as collateral
on the prior loan; and will make payments on a second loan
of $400,000 the city had received from the federal government
and loaned to CIC.
453
CONTINUED November 21, 1988
Shawn 0'Donnell pleaded with the council to delay its
decision and to give him time to present a creditor's plan
and a bankruptcy plan. And he urged council not to approve
a plan which maintained CIC Board of Directors Chairman
Joseph Driscoll as a board member, which the current CIC
reorganization plan does.
Nelson Carlo stated any reorganization plan before the
U.S. Bankruptcy Court has to list Driscoll as a director,
but those plans could be amended and it is his intention
to have Driscoll serve as a personal advisor only, and
not a member of the board of directors. Once he is in
possession of the CIC majority stock, he would call a
stockholder's meeting and Driscoll would no longer remain
with CIC as an official or in any other corporate position.
Joe Driscoll will not be involved in the day to day
O operation, I give you my word on that. I need Joe, he
is well known in the farm equipment industry. I want to
~ use Joe's talent.
~ Motion by Alderman Zilly, second by Alderman Kovachevich,
= that the terms and conditions of Resolution #2042 have
m been met by Nelson Carlo. Roll call. AYES - Aldermen
a Chapman, May, Bohler, Meade, Steck, Zilly, Kovachevich.
NAYS - None. 7 AYES 0 NAYS 0 ABSENT 1 EXCUSED (Larry Sarff).
Motion carried.
Motion by Alderman Steck, second by Alderman Chapman, that
it is in the best interest of the City of Canton to consent
to the transfer of the Foley stock to Nelson Carlo. Roll
call. AYES - Aldermen Kovachevich, Zilly, Steck, Meade,
Bohler, May, Chapman. NAYS - None. 7 AYES 0 NAYS 0 ABSENT
1 EXCUSED (Larry Sarff). Motion carried.
Motion by Alderman Meade, second by Alderman May, direct
the mayor, clerk and treasurer to release the Foley stock
certificate and to simply transfer and take all steps
necessary on the Foley stock to Nelson Carlo in conformity
to Resolution No. 2042. Roll call. AYES - Aldermen Chapman,
May, Bohler, Meade, Steck, Zilly, Kovachevich. 7 AYES
0 NAYS 0 ABSENT 1 EXCUSED (Larry Sarff). Motion carried.
ADJOURNMENT: Motion by Alderman Meade, second by Alderman
May, to adjourn. Voice vote, motion carried. Council
adjourned at 8:55 p.m.
~ .
~ C Y CLERK
/
APPROVED:
MAYOR