THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, July 8, 1995 TAG: 9507080409
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 57 lines
Jonathan Corp. says the Navy and Newport News Shipbuilding are to blame for its inability to pay more than 300 workers it laid off when it shut down June 16.
In a letter addressed to employees, Gary M. Bowers, Jonathan's president and founder, said the Navy and Newport News Shipbuilding owe Jonathan about $4 million. The letter is dated June 24, the day after the laid-off employees were to be paid.
``We are owed a great deal of money and a lot of these things are on the edge of being paid or being settled,'' Bowers said Friday.
Bowers declined to elaborate, saying he didn't want to blow delicate negotiations. He couldn't say when the laid-off employees might be paid.
Since it closed its operations, Jonathan has been in talks with NationsBank, its principal secured creditor, over an orderly liquidation of the firm's assets, Bowers confirmed Friday.
The letter to employees claims Newport News Shipbuilding owes Jonathan about $2.2 million under two subcontracts for work on the destroyers Stump and Thorn.
A spokesman for Newport News Shipbuilding disagrees. ``As to who owes who $2.2 million, we don't happen to agree with that,'' Tom Olds said.
Olds declined to elaborate.
Jonathan stopped work June 16 on the Stump and the Thorn at the giant Peninsula shipyard, leaving the jobs incomplete and laying off more than 300 employees.
The Norfolk-based ship repair firm notified the Navy June 19 that it was getting out of the ship repair business. It failed to pay more than 300 employees their final paycheck.
Bowers' letter to employees said Jonathan is currently negotiating with Newport News Shipbuilding for payment.
Jonathan has also been unable to collect money from two Navy claims worth to about $2 million, the letter said. Payment of this money could come at any time.
Navy representatives familiar with the claims could not be reached.
``Under these conditions there are no funds for our bank to advance on our line of credit and no funds existed to pay the payroll on 23 June 1995,'' Bowers wrote in the letter.
``These issues have consumed all of management energies and efforts in the attempt to wind down operations of the corporation in the best way possible under the circumstances,'' the letter continued. ``The commitment to collect these funds and to do all that we can to see that the employees receive their pay is an ongoing full-time process.''
Several laid-off employees said Friday that they haven't received the letter. by CNB