Standing on the same spot where his relatives launched the Lehman Brothers 100 years ago, David Perkins raised his hand before a bankruptcy trustee and shared details of the company’s downfall.
Perkins (pictured), the most recent vice-president of the commercial printing company, showed up at the Giaimo Federal Building at 150 Court St. Thursday afternoon for a bankruptcy hearing at the Office of the U.S. Trustee. He was met with a handful of creditors who are vying for the company’s assets.
Saddled with a Chapter 7 bankruptcy suit, the printing factory on East Rock’s Foster Street closed forever on Dec. 9, forcing Perkins and 19 other employees out of their jobs. Click here and here for stories about its rise and fall and the workers’ quest for money that was owed to them.
As he waited his turn in a carpeted hearing room, Perkins noted that he was sitting in exactly the same spot where the company was founded. His wife Eve is a descendant of Louis Lehman, who founded the company on Court Street along with Isadore Lehman in 1910. At that time, the building was two stories tall and Court Street ran straight through to the New Haven Green, he said. Over the next century, using much of the same equipment, the company would move to a bigger factory, and grow famous for its high-end stationary, envelopes and wedding invitations.
History came full circle when the bankruptcy trustee, Attorney Mike Daly, summoned Perkins to talk about the company’s final days. Thursday’s hearing featured two developments: The state stepped in to help workers get unpaid employment benefits; and a new group of people emerged that appears to be aggrieved.
Perkins approached the table wearing gray corduroys and Champion socks. He raised his right hand and swore to tell the whole truth about the company’s financial woes.
Daly kicked off the hearing by thanking Perkins for helping him as he prepared to liquidate the company’s assets. With the bankruptcy court’s blessing, Daly has sold $10,000 in paper and equipment to GHP printers in West Haven, where Perkins is now employed. Daly has filed a request to sell GHP another $50,000 in assets.
Those sales will not only help with liquidation, Daly said, but will help employees fulfill their claims. The plant’s 17 non-managerial workers are seeking $180,000 in unpaid benefits.
The workers themselves didn’t show up Thursday. In their stead, two state employees represented their interests.
Kris O’Brien, a state assistant attorney general, and Kimberley Adams-Ribeiro, of the Connecticut Department of Labor, want to help all the former workers collect their due. The duo asked for a litany of paperwork, including payroll info and employment contracts, so they can start calculating how much each worker is owed.
They were told they’d get a contract for the 13 unionized workers belonging to Amalgamated Lithographers Of America GCC/IBT Local 1‑L. For the other seven employees, there are no written policies and no employee handbook defining fringe benefits, Perkins said. He said he typically based fringe benefits on the union contract.
At the table, Perkins revealed a few details about the company’s finances as it struggled to emerge from bankruptcy over the last four years.
When it filed for Chapter 11 bankruptcy in 2004, the company had about $200,000 in assets, Perkins said. At the time, Lehman Brothers owed over 50 vendors a total debt of between $1 million and $10 million, according to court records. Fed-up creditors forced the case into Chapter 7 in December, forcing the plant to close.
The company has not filed taxes since 2006, he said.
Lehman Brothers has stopped paying benefits on one of its pension funds, Perkins also revealed. The company has one fund for hourly-wage employees and one for those with annual salaries. The first one is still paying benefits, even though the company stopped contributing to it in Oct. 2007. The second one “is not funded and has no cash to make payments,” Perkins said.
That announcement alerted the attention of attorney Marjorie Shansky, a well-known zoning attorney. Shansky showed up on behalf of another type of party that appears to be aggrieved: Retirees, and their relatives, who stopped getting pension benefits.
Shansky was there to represent Ann Lehman, the widow of Albert Lehman. Her husband ran the company before passing it on to their children, Eve and Eric.
Ann Lehman is a distinguished sculptress who teaches at the Creative Arts Workshop and at Yale. Still working in her 70s, she retained Shansky to seek out her unpaid pension checks.
Daly is in the process of sorting out all the pension information. At the request of the federal Pension Benefit Guaranty Corp, he agreed to continue Thursday’s creditors’ hearing until Feb. 1 at 1 p.m.
Meanwhile, he said he’s negotiating with one creditor, Wachovia Bank, to free up workers’ final paychecks. Checks were cut for the last 56 hours of work, but workers have yet to see the money: The funds were frozen because Wachovia Bank, a secured creditor, has first dibs on them.
Daly’s asking Wachovia to switch its lien to a different asset, freeing up the paychecks so he can send them to workers who’re spending the winter months struggling with unemployment. Daly emphasized that it’s the rules of bankruptcy court, not the wishes of the plant’s former owners, that have left the paychecks out of workers’ reach.
“Neither Mr. or Mrs. Perkins in any way hindered the payroll,” he said. “They continue to be advocates” for giving workers their due.
“Unfortunately,” he said, “the bankruptcy code isn’t as kind as some of the people who are working within it.”