Micro Industries files Chapter 7 bankruptcy

ROCK FALLS – Micro Industries has filed for Chapter 7 bankruptcy protection, turning over the closed business to a trustee for liquidation of its assets.

The bankruptcy petition was filed Oct. 29 in U.S. Bankruptcy Court in the Northern District of Illinois. The company’s creditors are scheduled to meet Dec. 3 in Rockford. In Chapter 7 cases, control of the company is ceded to a court-appointed trustee. The trustee will liquidate assets and pay as much as possible to creditors. When the proceeds run out, any remaining business debt is wiped away.

The building has two separate county assessments – the east end’s valuation is $47,263 and the 3-story portion is assessed at $6,687. The building could be sold in bankruptcy court, but that eventuality is unlikely.

The bankruptcy proceedings aren’t likely to make a big difference in the city’s approach to the building’s future. A best-case scenario is that the city could become involuntary owners of the property 4 years from now.

“We’re stuck at this point,” City Building Inspector Mark Searing said. “We can’t take immediate possession as a voluntary owner because then any EPA cleanup grant possibilities would be out the door.”

To become an involuntary owner, the city must wait until the building meets all abandonment requirements, including a 3-year period of no property taxes being paid.

While the wait will be frustrating for a city eager to stay on track with its riverfront development plans, officials know the routine.

“This is how we took a lot of the RB&W property,” Searing said.

The city, since 2005, has received more than $6 million in EPA funding through the brownfields program to clean up the Parrish-Alford, RB&W and Limestone sites.

A rough estimate just on demolition of the Micro Industries building comes in at $1.4 million, Searing said.

The city condemned the building at 200 W. Second St. on May 3 because engineers determined that the north wall was in danger of collapsing. The city also has concerns about a loading dock on West Second Street that has deteriorated beams in the roof.

Business owner Lance Robinson was told to stop operations at that time, but the city discovered that workers had still been entering the building. That prompted the city to file a temporary restraining order on July 3 to keep people out of the building.

Shortly after, Robinson said he planned to close the business permanently rather than make the costly repairs needed to have the condemnation edict lifted. He asked the city for about 3 months to get a jump on selling company equipment.

City officials have since attained a permanent restraining order that requires Robinson to notify the city before anyone enters.

Robinson did honor the city’s order to put up a 6-foot chain link fence around areas that posed a possible threat to public safety.

Micro Industries designed and operated die casting machines for the processing of a variety of metal parts. The company was established in 1959, and in its recent history, had employed between 50 and 100 people. It had about seven to 10 at the time of its closing.

What’s next

Micro Industries’ creditors will meet Dec. 3 in U.S. Bankruptcy Court in the Northern District of Illinois in Rockford. A court-appointed trustee will liquidate assets and pay as much as possible to creditors. When the proceeds run out, any remaining business debt is forgiven.