International/USM hearing on bankruptcy
The Federal Court set May 28 as a hearing date which could see International Shoe Machine/USM Corp. come out of Chapter XI bankruptcy. In the summer of 1998, Michael Taracano, who led a group of investors to acquire the assets of the International Shoe Machine Corp. in 1988, made an offer to acquire the USM Group of Leicester, England, with plans to merge USM and ISM word wide. The offer was rejected. In February, 2001, Taracano was able to purchase from the USM receiver the two North American companies, USM Corp., and USM Canada and the companies were merged into one.
However, USM was burdened with lifetime health care benefits to a large group of USM retirees. The company was also operating in an old plant under an unprofitable union operated manufacturing unit. The new management moved quickly to negotiate a reduction in retiree benefits and announced in March, 2001, that it would be outsourcing its future manufacturing requirements and moving to a new sales and service organisation in Nashua, NH.
In June, however, USM was sued in the Federal Court on the retiree health care issue as well as by the union to protect jobs. As a result, USM filed a Plan of Reorganization with the court seeking to emerge from bankruptcy. In its plans for the future, USM has been working on a number of initiatives which include manufacturing machines in Brazil; new Brazil and Eastern European distributors for ISMC, and the creation of new machines and products.
