Fairlane Shutdown

Existing VRTX Programs

We would like to figure out a way to continue the simplex programs with Meca , DRM and Aurora under Veratex.  They would make a good addition and probably turn Veratex profitable. Aurora would probably be temporary since they are interested in purchasing greige goods in the long term.

Its going to be difficult if not impossible to source simplex knitting in the US.  Gehring is a possibility but I don’t know if they have the equipment and I can’t find out without revealing our plan.   After Fairlane closes, the simplex machines could be purchased very cheaply but they may be expensive to move and we would have to find a home for them.  Again, Gehring would be a possibility for that.

 There is a remote possibility that the Adams would want to try to continue to operate Fairlane with another partner.   In that case, we would need to decide whether we will let them have the business or we would want something.  Also, what about the VRTX property?  They can’t have that for nothing.   We are owed a lot of money by VRTX.  What about the finished goods?  Same thing.

We need to make up simplex goods prior to shutdown so that we can supply the customer(s) until and if we are able to source the simplex knitting elsewhere.  

We need P317 and P355 and P379 greige inventory so we will need to boost production temporarily prior to shutdown.  

At shutdown, the greige goods and finished goods should be sold to Veratex.

Severing the Partnership

Kurt is going to think that “he has something coming”.  That’s just the way it is. He will not accept or understand that 160MAOC, John/Claude Simon and Veratex are the largest creditors and need to be paid before he gets anything. I will have to explain to him that his investment was an investment and it was all lost just like my investment in the knitting machines was also lost and that the others were loans to stay afloat and not investments.

Employees

Kurt

 I am also guessing that once I tell him we are shutting down, his only concern will be when.  He will not stay to clean things if he is not paid and we are not paying him to stay. I think his “last day” will be a week or so after the plant shuts down.

Leslie

Leslie is a converter so she will not be needed beyond shutdown day.  We can pick up where she left off as Veratex. 

Others

All other employees will be terminated on shutdown day and they will qualify for unemployment benefits.

Creditors

I believe there is enough in VRTX to satisfy all the creditors and have some left over.  Creditors will be paid out as receivables come in.

Hornwood Lease

I do not think Hornwood will hold us to the lease.  I will notify Chuck as soon as we make the decision to go and find out, as a formality, whether he plans on continuing Fairlane operations.  That is very, very remote. We will stop paying rent right after we shut down. Maybe we will go one month beyond.   I do not think he will be a stickler for us removing all our property as soon as we stop paying rent. We may be able to negotiate a warehousing lease for cheap but I don’t think its necessary.  

Veratex Operations At Fairlane

Finished goods warehousing-  It will be time to close out all the crap for lb goods or the best we can get.  After that, we will have to make do without a warehouse by using other people. 

Double Folding-   All these programs are break even or loss programs that we book to run machines.  That will no longer be necessary.  Gehring has double folding and so does Rebtex if any of the customers can afford to pay a real price for goods.

Record Storage-   All will be destroyed.

Rewinding- Hexcel program is a problem.  We will have to find someone to do this for us or we will have to drop it.

Again, we may be able to lease the warehouse on a month to month basis for cheap from Hornwood so we can continue double folding, inspecting warehousing.

We need to run up whatever we can rather than move it. We need to build inventory on standby items if we can and if we have the yarn. We need to start doing this now.

We need to ship out whatever greige that is worth anything before shutdown.

Sales Staff

Gil will be terminated as soon as the announcement is made.  

Lance will be terminated on 2 weeks notice as soon as the announcement is made.

Both will be offered the opportunity of continuing on a straight commission basis.  I don’t think it will be a surprise to either one.   Both have been exploring other opportunities.

There will be an issue with Gil.  He asked me back in July to be retained as a full time employee and I said no. He was clearly angling for benefits if we closed. 

VRTX Equipment

Whatever can be sold off will be sold off.  Whatever can’t be will be abandoned or given away.  

The beams are the biggest part. We have a lot of beams there.  Kurt completely lost track of them but I know what we started with within a few beams more or less.

The big warper is virtually worthless in the market.  

The small warper head may be worth a couple of thousand. 

Do you think it would be worth it to reopen Soperton as a warping, warehousing, inspection facility?  I don’t.

Clean Up

After the premises are vacated, I will go down for 3-4 weeks to clean up.  I have contacts with Fairlane employees that would probably help me.  If not, I can find someone.

I need to:

1.	Clean up my office
2.	Ship personal property to the farm
3.	Sell off the equipment
4.	Shutdown the computer system and transfer the server duties to NY

Public Relations

I do not think that a formal announcement needs to be made unless we are discontinuing the customer’s product. We were a converter before and supplied all the Veratex customers without having a mill.