Volume 47, Issue 4 - April 2012

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American Glass & Metal Defaults on Accelerated Loan; Closes



It has become a familiar story in the last few years: a major glazing contractor completing a number of large projects defaults on its loans when its lender “accelerate[s] the loan and demand[s] payment in full of all liabilities” (see March 2011 USGlass, page 24). In this most recent case, the victim of banking run amok was 30-year-old glazing contractor American Glass & Metals Corp. (AGM) of Plymouth, Mich., which closed in 2010. AGM also settled a last lawsuit with its bank in which AGM was a third-party plaintiff in November 2011.

AGM ranked at number 26 in the March 2010 USGlass List of Contract Glaziers with 2009 sales revenue of $12.2 million.

According to court documents, AGM originally obtained secured financing from Citizens Bank, which in June 2010 sold and assigned to Windmill Holdings Inc. all of its rights in financing documents. The documents state that “AGM’s obligations under the Financing Documents are secured by valid first priority liens and security interests in substantially all of AGM’s assets, which includes inventory, equipment, and accounts receivable, among other collateral.”

The documents note that, as of March 31, 2010, AGM was in default under those documents. “Accordingly, Citizens, the original lender, exercised its rights under the Financing Documents to accelerate the loan and demand payment in full of all liabilities from AGM and the guarantors.”

As of September 1, 2010, when the case was filed, $570,664.21 in principal and interest was due to Windmill, plus fees, costs, reimbursements, and attorney and consultant fees, which continued to accrue.

The case in question was brought against Hanover Insurance Co., which had provided payment and performance bonds for certain AGM projects. However, Windmill alleged that Hanover failed to perfect any interest in AGM’s inventory, equipment or accounts receivable. By failing to file a UCC-1 financing statement against AGM with the correct authority, which would have given Hanover precedence in the collection process when defaulted, Windmill states that Hanover’s rights as an unperfected secured creditor “are junior in priority to Windmill’s rights in the Windmill Collateral.” AGM with the correct authority, which would have given Hanover precedence in the collection process when defaulted, Windmill states that Hanover’s rights as an unperfected secured creditor “are junior in priority to Windmill’s rights in the Windmill Collateral.”

In November 2011, a judge ordered that Windmill’s claims against Hanover Insurance Co. be “dismissed with prejudice and without costs” and that Hanover’s third-party claims (the third parties being AGM, Vogelsberg Family Real Estate Investment Co. LLC, James Vogelsberg and Shelly Vogelsberg) be dismissed “subject to the terms of a Settlement Agreement and Mutual Release between such parties.”

In November 2011, AGM also was taken to court by the Michigan Glass and Glazing Industry Defined Contribution Pension Plan; Michigan Glass and Glazing Industry Welfare Insurance Fund; and International Painters and Allied Trades Industry Pension Fund for a breach of the fringe benefit provisions of collective bargaining on the part of AGM. According to court documents, AGM “owed $79,778.96 in audited indebtedness for the period of January 2008 through July 2010. Plaintiffs have collected $66,338.74 against the audited indebtedness, for a balance due of $13,440.22. Despite demand, defendant has refused to pay the balance due.” That case is still ongoing.

Company president James D. Vogelsberg confirmed to USGlass that the company is no longer conducting business, but declined to comment on details of the closure. “We did nothing wrong, but ran into the paranoid bankers of 2010,” he said.

Woman Sues Apple for Injuries from Glass Wall at New York Store
An 83-year-old woman recently filed a million-dollar suit against Apple Inc., alleging that she sustained personal injuries “due to the dangerous glass doors at the Manhasset [N.Y.] Apple Inc. store location.”

Evelyn Paswall of Queens, N.Y., alleges that on December 13, 2011, she was planning to return her iPhone to the store when she “walked directly into the clear glass doors at Apple’s Manhasset location and fractured her nose.”

The complaint includes a black-and-white photo of the store, said to depict its “completely clear front entrance and wall.”

Paswall claims that the company was negligent in “allowing a clear, see-through glass wall and/or door to exist without proper warning, and in causing [her] to sustain personal injury.” She further alleges that the company and its employees “fail[ed] to take those steps necessary to avoid the accident herein without any contributory negligence on the part of the plaintiff herein.”

The complaint does not identify the manufacturer of the glass door system, nor the company that installed it. Paswall seeks $1 million from the Cupertino, Calif.-based company, along with a jury trial. Apple officials had not yet responded to requests for comment at press time.

The kind of glass that Apple uses in its stores is pre-dominantly used in museums and jewelry stores, says Bob Brown, principal of Robert L. Brown and Associates in Martinsville, Va. “It’s probably 1/2-inch thick ultra-clear, low-iron, tempered glass,” he says. “Manufacturers of those ultra-clear glass [products] charge a premium for their product.

The suit was filed in March in the U.S. District Court for the Eastern District of New York.

—Megan Headley





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