LLC foreclosure sale cancelled

Published 12:00 am Thursday, September 6, 2007

LINDEN &8212; Following two weeks of negotiations, the foreclosure sale of Linden Lumber Company has been cancelled and a settlement has been reached between the company and Federal Land Bank of South Alabama to sell the loan to Wachovia Bank. Wachovia, which is the company&8217;s working capital lender, has cancelled the foreclosure sale.

Commissioner Dr. Ken Tucker said he communicated with Federal Land Bank through their attorney and was informed the foreclosure has been cancelled, but the terms of agreement between the parties involved was confidential.

Federal Land Bank announced the foreclosure of the company last month including its properties in Linden and Thomasville. The foreclosure sale date was set for today in front of the Marengo County Courthouse. The sale notice includes all the buildings, fixtures and other tangible and intangible property.

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The cancellation is in part due to all parties working diligently over the last week to get the foreclosure postponed or cancelled, Tucker said.

Tucker said the news takes the time pressure off the county commission and allow them to continue to look at the considerations and stipulations of the potential bond issue and do their due diligence on the matter.

Tucker said he could not speak for the other commissioners but he felt everyone was very pleased that the foreclosure had been cancelled and said, &8220;the discussions are continuing,&8221; regarding the $7 million loan to Linden Lumber.

Linden Lumber&8217;s Chief Operating Officer Hugh Overmyer said in a press release Thursday &8220;the settlement action today should allow the Marengo County Commissioners to proceed with a bond issue of up to $7 million whose proceeds will be used on behalf of Linden Lumber to include debt retirement and acquisition of new equipment.

The bond issue was approved late last month with four stipulations required by the commission, all of which are expected to be met over the next several months, according to Overmyer&8217;s release.

The Marengo County Commission unanimously approved a loan of up to $7 million to Linden Lumber Company, following a request for assistance by the company.

The proposal&8217;s four stipulations are:

An independent audit of Linden Lumber.

County approval of the restructuring of the loan with Wachovia Bank for the operating line.

County approval of restructuring of the loan with Federal Land Bank.

An independent audit of the assets the county would be taking mortgage on.

The commission has the authority to annul the loan agreement if they are not satisfied with the findings of any of the audits or restructuring agreements.

Under the agreement, the county will use a bond issue to borrow up to $7 million. They will in turn loan the money to Linden Lumber with an annual interest rate of 5 percent, not to exceed 6.5 percent. The terms of the loan extend for 20 years.

Overall, employees and suppliers of the Company have remained loyal throughout these uncertain times, he said.

Linden Lumber Company reports the county expects the loan to enable the company to retain 425 jobs and the county to retain $13 million of annual payroll having an estimated economic impact on the county of $50 million per year.

Kelli Wright contributed to this report.