JACKSON, Miss. (May 3, 2000)—A Mississippi federal court said it will grant a stay on a previous order that Condere Corp. give up curing presses at its Natchez, Miss., tire plant only if the company submits an $11.85 million appeal bond as security for the equipment.
Judge David Bramlette of the U.S. District Court for the Southern District of Mississippi, Western Division, ordered April 20 that Condere´s bond must be submitted and approved by the court by May 8, or 10 business days after his opinion filing.
Condere—whose assets were sold to Quincy, Ill.-based Titan International Inc. in 1998—is appealing Judge Bramlette´s Jan. 25 order that it return 11 presses and several other pieces of equipment it leased in December 1993 from New Jersey financing firm CIT Group Equipment Financing Inc. A stay would allow Condere to keep the equipment during the appeal.
The Natchez plant now is controlled by Titan, while Condere—which filed for Chapter 11 bankruptcy protection in 1997—is a shell operation. Condere consented to a U.S. Bankruptcy Court order rejecting the lease, which was in default, in September 1997.
CIT subsequently sold the 11 presses to Indiana, Pa., tire maker Specialty Tires of America Inc. for $250,000. After Condere refused to surrender the equipment, CIT sued the company in January 1998. Specialty followed that May by suing CIT for $12 million for breach of contract.
Specialty Tires still is waiting to get the presses. Earlier this year, a Pennsylvania federal court ruled on summary judgment in CIT´s favor, saying the Condere case made it impossible for CIT to deliver the equipment. Specialty Tires appealed that decision and the outcome is pending.
Condere´s arguments for keeping the equipment in Natchez included that the lease with CIT was rejected yet not terminated; that the lease was actually a security agreement for equipment it could pay for under its bankruptcy reorganization plan; and that the equipment was not personal property, but a fixture in the plant.
However, Judge Bramlette ruled against Condere in all areas.
In addition to the appeal bond ruling, Condere previously secured a bond valued at $2.05 million after the original CIT lawsuit in order to keep equipment pending the case´s conclusion.
Maurice Taylor Jr., Titan CEO and president, and Sam Scott, a McGlinchey Stafford attorney representing CIT, both said the requirement of bonds as security in such cases is commonplace.
CIT still plans on delivering the presses to Specialty Tires, Mr. Scott said.