Investment Firm Buys Berkeley’s Troubled Pacific Steel

By Berkeleyside Editors
Berkeleyside

West Berkeley’s Pacific Steel Casting, which filed for bankruptcy earlier this year, is slated to be sold to a private equity firm for $11.3 million, according to the Dow Jones Daily Bankruptcy Review.

Monday, a judge in Oakland approved the offer from Speyside Equity to purchase the steel parts manufacturing plant. A Pacific Steel spokeswoman told Berkeleyside on Thursday that there had been no other offers.

Pacific Steel attorney Julie Rome-Banks said in court papers that the company employs 410 people, Dow Jones reported. The company was up for auction earlier this month in U.S. Bankruptcy Court in Oakland.

Pacific Steel makes carbon, low-alloy and stainless steel castings for U.S. and international customers, largely for heavy-duty trucks and construction equipment. It has been run by the Genger family for four generations and opened in 1934.

Pacific Steel spokeswoman Elisabeth Jewel told Berkeleyside that, as far as she knows, Speyside plans to keep Pacific Steel open.

“As far as we know, they intend to stay in Berkeley and continue operation,” she said Thursday. No significant changes, related to staffing or otherwise, have been announced

The transfer of ownership is expected to take place in the next few months, she added. The deal had been in the works for a number of months, and no other offers had been expected — or were received — during the court proceeding.

Speyside could not be reached for comment Thursday. The company is based in New York City and also owns an aluminum foundry, Stahl Specialty Co., in Missouri.

Pacific Steel, which started out in the 1930s as a military supplier, has faced one blow after another in recent years.

First, the company lost a third of its workforce in 2011 after a U.S. Immigration and Customs enforcement audit. Workers’ compensation insurance costs then skyrocketed after a flood of claims came in from departing workers.

Then, in January, the company settled a lawsuit about the timing of worker lunch breaks for around $5.4 million, which is owed to about 1,300 current and former employees. According to the bankruptcy filing, the company “was not in a financial position to immediately fund the settlement.”

Jewel said in March that business continued to be good, despite the challenges, but said the settlement had put a definite strain on the company and its prospects.

“It was a cavalcade of unfortunate circumstances,” she said Thursday. “All those factors happening within a fairly short period of time just strained the company to the point of breaking.”

She added: “This company has been in the Genger family for 75 years. It’s a bittersweet moment, I’m sure, for this family that stuck it out for many years.”

Read past Berkeleyside coverage regarding Pacific Steel.

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