All News & Blogs
Bank has withdrawn funding from company seeking to buy Potomac Supply in Westmoreland County
Date published: 10/10/2012
RICHMOND--A federal judge postponed to next week a hearing on the possible sale of a bankrupt Westmoreland County lumber mill after a lawyer said the buyer's financing fell through.
Potomac Supply, once a major employer on the Northern Neck before filing for bankruptcy early this year, was due in U.S. Bankruptcy Court in Richmond today for a sale hearing.
The company had entered into an agreement with Chesapeake Bay Enterprise for Chesapeake to buy Potomac Supply's assets for about $20 million.
That agreement came last month after an auction of Potomac Supply's assets was canceled due to low bids.
But now Chesapeake's financing appears up in the air.
Attorney John Maddock, representing Chesapeake, said Chesapeake's lender had withdrawn. Maddock said Chesapeake's owner is working "almost around the clock to procure alternate financing," but that the original sale agreement was no longer viable.
Maddock said he understood that Potomac is now seeking other buyers.
Both Maddock and Potomac's attorney, who participated in the hearing by telephone, said all the parties are working amicably together.
Judge Douglas O. Tice Jr. urged them to continue doing so, and postponed the sale hearing to next Wednesday at 2 p.m.
Chelyen Davis: 540/368-5028