Water Gremlin, which has been mired in pollution scandals in recent years, has filed for Chapter 11 bankruptcy protection and is in the process of selling the company.
Founded in 1949, the White Bear City-based company makes lead battery terminals and fishing washers. Water Gremlin In 2019, he had a major conflict with regulators over the facility’s pollution. The company had to pay more than $7 million in fines to the Minnesota Pollution Control Agency (MPCA) for toxic air emissions.
The MPCA commissioner at the time said the company was “putting people’s health at risk”. The MPCA imposed another $325,000 in fines in 2021 for violating hazardous waste and industrial wastewater laws.
The MPCA issued a new air emissions permit for the Water Gremlin facility in June with “more stringent emission limits and operational requirements.”
In July, Tokyo-based Okabe Co. Ltd., Water Gremlin’s parent company, said the dispute “could result in substantial liability” to Water Gremlin. The affidavit in the bankruptcy case mentions potential liability in lawsuits related to pollution issues and declining sales. The company’s sales will drop from $57.8 million in 2018 to $46.8 million in 2022, the court newspaper reported.
The company is “evaluating a number of binding offers from interested parties to acquire all of the assets of its US and European divisions,” Water Gremlin said in a statement. The bankruptcy filing can drive sales “in a very efficient way.” Related Water Gremlin Holdings Inc. and WG subsidiaries filed for bankruptcy protection.
“I have been advised and believe that the debtors may be able to restructure without bankruptcy,” Bradley Hartsell, president of Water Gremlin, said in the affidavit.
And while the company currently has $65.7 million in assets and $27.8 million in liabilities, it also said Mizuho Bank, its largest unsecured lender, is no longer providing a line of credit to Water Gremlin. According to court papers, the company owes Mizuho $21.6 million.
Okabe said the 178-employee company had a net loss of $22 million in 2022.
“The profitability of the battery terminal business in the United States has declined significantly. We have identified the battery terminal business in the United States as an unprofitable business,” Okabe said in a statement.
In its court papers, Water Gremlin also blamed the loss of market share on negative news reports related to pollution issues.
Water Gremlin’s bankruptcy filing does not yet detail much of its financial losses. The company says it has between 200 and 999 creditors, with debts of up to $50 million.
The company’s 30 largest creditors owe $23.9 million.
The second largest creditor, Eagan-based environmental services provider Gopher Resources, is owed more than $516,000. Other lenders include Ramsey County, Xcel Energy, Masterson Personnel in Plymouth, White Bear Township and UnitedHealth Group.
“Chapter 11 provides an appropriate forum to effectively resolve pending litigation related to the company’s past solvent use,” Water Gremlin said in a statement. [trichloroethylene, or TCE] In the process of production, which he voluntarily stopped at the beginning of 2019, “said the statement of the company.
Water Gremlin Aquila, the company’s European division, is not part of the bankruptcy proceedings.