NEW YORK Used machinery and equipment at a now-defunct scrap facility in Seattle will be auctioned off July 24, five months after the recycler filed for bankruptcy.
Portland, Ore.-based liquidator Pahl Industrial Inc. informed industry participants of the auction this past week. Details of the equipment that is now on sale are available on the liquidators website.
Seattle scrap recycler Independent Metals Co. Inc. shut operations and filed for Chapter 7 bankruptcy liquidation in U.S. Bankruptcy Court in Washington state in February (amm.com, Feb. 24).
In its filing, the company, which ran its operations on leased land, listed assets of more than $3 million, including property, recycling equipment, roll-off containers and vehicles, and liabilities of more than $5 million. Umpqua Bank in Roseburg, Ore., holds the only secured claim at more than $2 million.
Market participants said Umpqua Bank was left with no choice but to auction the equipment as there were no takers for the entire scrap facility, which allegedly faces some tough environmental challenges in an extremely competitive market.
"Their shutdown was likely due to how tough the scrap market is in the Northwest," said an executive at one scrap company in the region. "This was not a surprise to me that they folded. I expect another one or two major players in the Northwest to shut their doors this year. Independent Metals had to compete with the two super shredders in town. They didnt have enough shredder feed to keep up with the big boys. It was not as efficient, maintenance was high (and) margins are too low in the Northwest," he said.
Market participants said they were unaware if Independent Metals president Michael OFarrell has joined another scrap company or has exited the industry entirely. He could not be reached for comment.
However, according to traders in the region, OFarrells brother, Marty OFarrell, has returned to Seattle after a long hiatus from the industry and started a smaller nonferrous scrap recycling operation at a property not far from now-defunct Independent Metals main operation. Marty OFarrell could not be reached for comment.
"The older brother, Marty, has come back from retirement to fund the Plant I operation and ditch the iron side of the business. Plant I is now open for business again, running as a small feeder yard. We are all fighting up here for market share. The climate is really tough in both the Portland and Seattle markets," the first source said.