Stinger files for bankruptcy

Stinger Welding, Inc., the span and bridge builder that during its heyday employed more than 100 workers in Libby, has filed for Chapter 11 protection under the U.S. Bankruptcy code.

Stinger Welding lost its CEO,  Carl Douglas, when his airplane crashed into Swede Mountain on Dec. 19.

The bankruptcy filing, which will protect Stinger from creditors for at least 30 days, was filed in bankruptcy court in Arizona District Court in Phoenix.

Stinger Welding’s, home office is located in Coolidge, Ariz.

In the petition filed March 8, Douglas’ wife, Stephanie Jordan, sought Chapter 11 bankruptcy protection for the company started by her late husband, whose business was left with heavy debt.

Chapter 11 allows the debtor to propose a plan for profitability post-bankruptcy, which may include trimming costs and seeking new sources of revenue or income, while temporarily holding creditors at bay.

On the petition, Jordan, through her attorney  Franklin  D.  Dodge of Ryan Raypp & Underwood of Phoenix, Ariz., checked a box that indicated between 50 and 99 creditors. In subsequent legal paperwork, there is a list of 142 creditors. Fourteen of those creditors list Libby as their business address and two more regional creditors were in Bonners Ferry, Idaho, and Huron, Mont. 

Of the top 20 creditors, the total debt is $5.863 million, and the list beyond them is extensive. Among the top 20 is the Internal Revenue Service for $875,922; General Steel & Supply, Co., of Dickinson, N.D., $849,567.74; Washington Department of Revenue for taxes, $760,866; Mountain States Steel for $734,502.12; Cobb, Strecker, Dunphy & Zimmerman for back insurance payments, $581,000; and Tommy Fisher, CEO of Fisher Sand & Gravel, Co., of Dickenson, N.D., for $536,990. Fisher is among the largest contributors to Stinger. With his holdings in the sand and gravel company and General Steel, he is owed at least $1.386 million.

Phone and e-mail messages left for Fisher were not returned.

After Stinger filed, the courts were inundated with subsequent legal requests seeking to prevent the company from obtaining such protection.

On March 13 in the same Arizona District Court, attorneys for Fisher Sand & Gravel and Steel Girder, LLC, filed a motion to dismiss the Stinger bankruptcy petition as an unauthorized and bad-faith filing  “because there is continuing loss and diminution to the estate with no prospect of rehabilitating the debtor,” the attorneys for Ryley, Carlock & Applewhite wrote in their appeal.

“Apparently, they feel this is a move more to protect Stephanie Jordan’s assets than really rehabilitate Stinger Welding,” said R. Allan Payne, the attorney representing the Lincoln County Port Authority, which has been leasing land to Stinger and who is among the long list of creditors named in the petition.

Upon learning of Jordan’s petition for bankruptcy protection, Payne, on behalf of the Port Authority, also filed a request to stay the motion for bankruptcy protection, which ultimately was granted Tuesday, March 19, by Arizona Bankruptcy Court Judge Brenda Moody Whinery.

Payne said the Chapter 11 filing will only delay the inevitable, which is the likely demise of Stinger Welding. In the end, Payne is confident the Port Authority will win its case against Stinger for ownership of the Stinger building, which Stinger called its Northwest Operations base. The Port Authority allowed Stinger Welding to use the building as collateral to secure a loan.

“I am confident the Port Authority will retain ownership of the building,” Payne said. “This will delay things, but in the end I think things will turn out our way.”

Paul Rumelhart, executive director of the Kootenai River Development Council and who directs the Port Authority, said he learned of the bankruptcy filing Tuesday.

“Right now, everyone’s hands are tied. It will take awhile before we can determine what paths to take,” Rumelhart said. “There are prior liens, unpaid taxes and money owed to creditors. It’s going to take awhile to sort out.”

Rumelhart got defensive when asked about the demise of Stinger and whether the Port Authority was correct in bringing the bridge and span builder to Lincoln County.

“Stinger was a good thing for Lincoln County,” he said. “(To those who criticize) I’d ask them what they’ve done for Lincoln County? At one point there were 104 jobs there. For those who are critical, I’d say it’s not like we funded a line of credit. What we invested in is the building, and it’s still there. I am excited about the potential for the building.”

Lincoln County Presiding Commissioner Tony Berget said as much as he would have liked to see Stinger do well in the county, it’s now time to move on.

“Our No. 1 priority is jobs,” Berget said. “I agree. We need to get another business in that building. Right now, we got families that are split between here and in North Dakota.”

Among the 14 local creditors is Rick Gullingsrud of Rick’s Rental, who is owed about $3,000 by Stinger.

“I had heard they were probably going to go under, so I had been calling for about four months trying to get paid,” Gullingsrud said. “It’s only $3,000, but it was my $3,000. Yeah, I’m pissed.”

Among the other businesses owed by Stinger are the Sandman Hotel, the Evergreen Motel, the City of Libby, Ace Enterprises, Lincoln County Landfill, Lincoln County Treasurer, Northern Energy, Co., St. John’s Lutheran Hospital, T.L. Ward Trucking, Treasure Mountain Restaurant and the Venture Motor Inn.

Stinger Welding has been laying off workers a little at a time, Watkins, the Job Service manager, said. To date, Stinger workers in Coolidge, Ariz., still are working.

Phone messages seeking comment for Stinger Receiver John Boyd, of MCA Financial in Phoenix, were not returned.