THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, October 27, 1995 TAG: 9510270510
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 87 lines
They came, scores of businessmen and women from around the world, to pick through the detritus of another failed company.
``I don't like these auctions,'' one said, patting his stomach. ``They make me upset.''
They were stripping the core out of what remained of Jonathan Corp., a once high-flying shipyard on the Elizabeth River in Norfolk. Unable to get the repair contracts to meet the financial demands of its recent bankruptcy reorganization, Jonathan shut its doors in June, throwing more than 250 employees out of work without their last week's pay.
The auctioneers' relentless chatter droned all day as lot by lot everything that could be carried, trucked or driven away was sold. The auction had been going since Tuesday as cables, pickup trucks, rescue rings, desks, machine tools and much other gear was sold to the highest bidder.
By the end of Thursday all that remained was the land and empty shells of the buildings.
And they too had been sold in the high-noon auction that attracted only two active bidders. The winner was a New Jersey company that plans to disassemble and scrap old Navy vessels at the site.
Jonathan was the first shipyard in Hampton Roads to fail as a result of the Navy downsizing the followed the end of the Cold War. The company, founded and owned by Gary M. Bowers, was caught with too much real estate debt when business dropped off. It sought a bankruptcy reorganization in December 1993.
The company emerged from bankruptcy in March, but still its debt load was too high and it abruptly closed three months later.
``It's really hard,'' said Jim Thomas, who used to work at the shipyard as a supervisor. ``I got real depressed last night.''
Thomas attended the auction to buy things for his current employer, DALCO Electronics, a former Jonathan subsidiary that survived the bankruptcy.
The auction was conducted by MACI International Inc. of Richmond for NationsBank. Jonathan signed over its shipyard and everything in it to the big bank to get itself out of bankruptcy.
MACI's owner and chief auctioneer Mark Motley said the auction was excellent with most things going for good prices. It attracted bidders from Hampton Roads as well as Peru and New Zealand , he said.
Many companies showed up to see if there was anything they needed that could be bought cheap.
Ken Mebane, industrial division director for Colonna's Shipyard Inc., was looking for items his Norfolk shipyard needed. He came away with a pair of welding machines and other gear.
He was paying about 30 cents on the dollar compared to new equipment, he said. A fair price for used equipment, but a bargain, he said.
Some were turned off by the bidding. ``These prices, they are too high,'' said Enrique Stiglich Grieve, president of Graus S.A., a crane rental company in Lima, Peru.
Grieve bid on just about all of the six large cranes sold Thursday afternoon, but dropped out of the bidding as the prices climbed. The cost of shipping the cranes back to Peru separated what he could pay from the winning bids.
``You wouldn't believe the prices they're getting for some of this stuff,'' said Robert Walker, president of Marine Hydraulics International Inc., a small Norfolk shipyard that just emerged from a bankruptcy reorganization. He was there to bid on a few compressors and see who bought the property, he said.
But others came away happy. ``It's fair deals, some high, but fair prices,'' said Jose Colon, vice president and general manager of Redonda Construction of Puerto Rico. Colon bought a 100-ton crawler crane with a 100-foot boom for $122,500.
Many people milled about watching the action or loading earlier purchases on to flatbed trucks.
Others lamented the passing of a company that once employed more than 900 people and had annual sales of about $70 million. ``Everything here has a story,'' Thomas said. ``Now that's all gone.''
KEYWORDS: JONATHON CORP. AUCTION by CNB