Neil Gloger, CEO of Cleveland-area-based InterGroup International, says the company’s bank, Fifth Third Bank of Cincinnati, has sought receivership for the company under the Ohio Revised Code.
In an interview with Recycling Today in mid-February, Gloger says, “Over the last 18 months, we have had five customers go bankrupt or just disappear.” This left the Euclid, Ohio-based company with $1.2 million in uncollectable receivables, he says, which put InterGroup International in default of the loan covenants with its senior lender.
“Our agreements with the bank expired, and they notified us they would seek receivership under the Ohio Revised Code,” Gloger adds.
InterGroup International did not have the cash available to fund a Chapter 11 restructuring of the company, he says. In addition, Gloger says he was not really given that option by the bank.
While Gloger says he takes ownership of all the decision-making that led to this point, he says he would make “virtually all of the same decisions.”
Gloger adds, “I wish the bank would have looked at it with a different lens, but they didn’t, and that’s that.”
He expresses dismay at the situation the receivership creates for vendors and customers of InterGroup International. “I appreciated the support of vendors and customers and other service providers who are going to pay a price for our demise,” he says. “I sincerely wish that were different.”
Gloger says he will help Fifth Third Bank wind down the company in an orderly fashion to achieve the best outcome for the company’s creditors.
Gloger founded InterGroup International in 2006 as a brokerage firm for industrial plastics. (See the profile on InterGroup from the November 2010 issue of Recycling Today here.) The company added processing capabilities shortly after its founding and also had toll processing arrangements in place.
More recently, however, InterGroup exited the processing space, opting to use toll processors for all of the material it handled.
The company was named to Inc. magazine’s list of the fastest growing companies for three consecutive years from 2010 through 2012. In 2010, InterGroup was included at No. 239 on the list and landed as the fastest growth company in the manufacturing subsection based on its revenue growth between 2006 and 2009. In 2011, InterGroup occupied the No. 799 slot, while in 2012 the company ranked at No. 685 overall. In 2012 it was also the 15th fastest growing manufacturing company and the fifth fastest growing company in the Cleveland region, as ranked by Inc.