A Putnam County plastics company has filed for bankruptcy protection and has made a deal to sell the business.
Brewster Plastics Inc., of Patterson, declared $1.8 million in assets and $3.7 million in liabilities in a Chapter 11 petition filed on June 3 in U.S. Bankruptcy Court, Poughkeepsie.
On March 27, its real estate affiliate, Highland Group LLC, petitioned for Chapter 11 protection and declared $6.4 million in assets and $7.2 million in liabilities.
The plastics business had expanded in 2010 with the help of tax breaks from Putnam County.
“Unfortunately,” Brewster Plastics’ president, Brett Wallace, states in an affidavit, “business did not maintain its growth levels so that it could take full advantage of the capacity of the larger facility.”
His father, Robert, of Mahopac, founded Brewster Plastics in 1971 and owns it. It started out with three injection molding machines and grew steadily, adding 20 molding machines by 1997 and moving into a new factory in Robin Hill Corporate Park.
In 2010 the factory expanded and added another 13 molding machines, for a total of 36. At one point, it had 40 employees, according to its website. Today it has 13.
Robert Wallace also owns Highland Group, the owner of the factory’s property in Patterson. In 2020, he deeded it to the Putnam County Industrial Development Agency for tax benefits. The agency leased it back to Highland and Highland leased it to Brewster Plastics and mortgaged it to the agency.
Highland Group also mortgaged the property to Mahopac Bank and borrowed money from the U.S. Small Business Administration.
The investments were made to increase Brewster Plastics’ capacity, according to bankruptcy records, and grow the business.
The plan did not work.
Brewster Plastics booked $2.9 million in revenue in 2022 and $1.7 million in 2023, according to its petition.
The plastics company has failed to turn a profit for many years, according to Brett Wallace’s affidavit, and Highland Group fell behind on its real estate taxes and mortgage obligations.
Highland Group owes $2.4 million to the Putnam County Department of Finance, $2.25 million to the Small Business Administration, $1.5 million to AKT Three Reality (formerly the Mahopac Bank mortgage), and $1.1 million to the Putnam County Industrial Development Agency, according to its bankruptcy petition.
Brewster Plastics also lists the AKT Three Realty and SBA debts as its liabilities.
The company’s intention in filing for bankruptcy protection, Brett Wallace states in the affidavit, is to continue operating while trying to sell it as a going concern.
Brewster Plastics and Highland Group have an initial deal with Celltreat Scientific Products, of Pepperell, Massachusetts, to sell the plastics company for $376,200 and the real estate for $5.4 million,
“subject to higher or better offers.”
