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Genova Products Closing, May Have Buyer

Genova Products Closing, May Have Buyer
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By West Kentucky Star Staff
Jan. 21, 2020 | PADUCAH
By West Kentucky Star Staff Jan. 21, 2020 | 03:25 PM | PADUCAH
Genova Products has sent out notices to employees in compliance with the WARN Act, indicating that the Paducah plant will close. 

The Michigan-based company began laying off employees last fall, and issued a statement in December saying there was a raw material shortage that lasted longer than anticipated. 

A Tuesday statement from Director of Operations Joe Pusateri says Genova was forced to halt operations when bank funding for materials was cut off, "with no reasonable notice." Since then, Pusateri said the company had been trying to restore funding, but had several deals fall through at the last minute. 

Pusateri said their previous layoffs fell under a loophole in the WARN Act, when public notification could hamper a company's ability to secure funding to stay open. But, he indicated some of their efforts were hurt anyway, when potential investors or suppliers heard of their struggles through news and social media reports. 

Pusateri said, "the unintended consequence of these proclamations made a most difficult job nearly impossible to achieve."

Pusateri said they believe a buyer is in place and the deal is being reviewed by their bank. He said they will pass along more details when they are available.

In December, the city of Paducah requested the West Kentucky Workforce Board to implement their rapid response service team for displaced Genova employees, and notified the Kentucky Education Workforce Development Cabinet of the situation.

City Commissioner and Chamber of Commerce President Sandra Wilson said then that employees should go to the Kentucky Career Center to get assistance in filing for unemployment.


Here is the complete press release from Genova on January 21, 2020:

All 

Please be advised that Genova Products is sending out notices to comply with the WARN act.  Genova falls under the "Faltering Company" exception, and therefore could not send the notices out any sooner. 

(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings 

Genova maintained its operations until such time the bank no longer provided funds for raw materials, and did so with no reasonable notice. Since that very day, efforts have been made to restore funding, thereby restoring operations. Our singular objective was to get the plants up and running at all locations so all of our employees could return to work. We believed we secured the funding on many occasions, only to have the deal sour for one reason or another at the last minute. 

Some of our efforts were hurt by our internal challenges being so well publicized in the news and social media. As customers and suppliers learned of our issues, they became wary of continuing to further our business relationships. Our challenges became public through the frustration of the people involved, which was completely understandable under the circumstances. The unintended consequence of these proclamations made a most difficult job nearly impossible to achieve. 

We currently have a potential buyer that Genova has agreed to the terms of their proposal. It is currently being reviewed by the bank and we hope to have some direction soon.  Until such time I wanted to make you aware of where we are at and the notices were being sent out. As additional information becomes available, I will update everyone accordingly. 

Sincerely,


Joseph Pusateri
Director of Operations
Genova Products, Inc.
5400 Commerce Drive
Paducah, KY 42001

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