A group of vendors or companies that do business with Cottonwood-based Hydroswing filed a petition March 3 in the Minnesota district of bankruptcy court claiming Hydroswing owed them thousands of dollars in unpaid bills. This was done in effort to force the company into Chapter 7 bankruptcy.
According to court records, the amount of money owed by Hydro-swing to its creditors (vendors) is staggering.
Hydroswing Hydraulic Doors and Walls of Cottonwood, got its start in 1999. The company was purchased two years ago and is now owned by Hydroswing Ltd., of Preston, Lancashire, England. For years the company seemed on solid ground and employed about 30 Cottonwood-area residents at its plant. However, a group of vendors or companies that do business with Hydroswing, filed a petition March 3 in the Minnesota district of bankruptcy court claiming Hydroswing owed them thousands of dollars in unpaid bills. This was done in effort to force the company into Chapter 7 bankruptcy. According to court records, the amount of money owed by Hydro-swing to its creditors (vendors) is staggering. According to a verification statement, Pace Manufacturing Division of Atlas Hydraulics, Inc., of Brandon, S.D., has a $576,894.27 claim for shipment of goods against Hydro-swing, which is partially secured by assets of Hydroswing, Inc., but believe it is under-secured and acknowledge it has an unsecured claim for an amount not less than $5,000. Mike Altena, chief financial officer of Kooima Company of Rock Valley, Iowa states in court documents his company has a $155,003.85 claim for shipment of goods against Hydro-swing, with the same under-secured claim as the above company. State Steel of Sioux City, Iowa is making a similar claim with a dollar amount attached of $181,367.79. R.H. Hummer, Jr. Inc. of Amana, Iowa has a claim in for $151,472.42. The petition filed by these creditors against Hydroswing earlier this past month was successful, according to U.S. Bankruptcy Court records. An order for relief was granted to Hydro-swing by U.S. bankruptcy judge Gregory Kishel, according to court records. Under the court order, Hydroswing has one week to come up with a list of creditors and two weeks to file a schedule of assets and liabilities, and a statement of financial affairs. These court proceedings are just the latest installment in the downward spiral of Hydroswing. Rumors have circulated for months now about troubles with the company, but company officials, through other media outlets, have denied there was any problem. Company officials stuck to a script of saying the company was reorganizing, and employees would soon be back on the job. It is clear now this is not the case, as the secured creditors are going after Hydroswing’s tangible assets. In addition to workers being unemployed and large suppliers being owed massive sums of money, some smaller, more local contractors have felt the pain of Hydroswing closing its doors. Chad Van Drunen, a trucker from Minneota who hauled Hydro-swing doors is owed somewhere in the neighborhood of $38,000 in back pay. “I hauled for (Hydro-swing) for three years,” Van Drunen said. “It was about a year ago that I started noticing that they (the company) were pushing their payments further out and it was taking me longer and longer to get paid.” Van Drunen eventually quit hauling for the company six months ago, but he went back to it when Hydroswing started paying cash up front. “They even paid down on their bill a little bit,” Van Drunen said. “They were really busy, so I thought things were turning around. I knew they’d leased a couple of new buildings and purchased some new, big equipment.” Then the hammer came down. Hydroswing closed its doors, leaving Van Drunen out in the cold. “I’m not like the big guys in this picture,” Van Drunen said. “I’m an unsecured creditor. I’m going to get in on the bankruptcy proceedings and hope that I can get 10 cents on the dollar.” Even if Van Drunen gets his 10 cents on the dollar, that still leaves him with $34,000 or more in unpaid bills, and the impact has been immediate. “When I was hauling for Hydroswing, I had seven trucks with leased operators,” Van Drunen said. “I’m down to two trucks now. “I know they (Hydroswing) owe a lot of people a lot of money, and I’m not the only one in this boat. Customers have been left hanging in the wind, too. Ronnie Cooper, a general contractor from Currituck County, N.C. ordered a door from Hy-droswing in September 2010. “They called me in Nov-ember 2010 and told me my door was completed and ready to ship,” Cooper said. “I had already made a $5,000 down payment on the door. “I wasn't ready for them to ship it, though, so they said they’d hold the door.” In December 2010, Cooper called Hydroswing and said he was ready for shipment, but the door never arrived. He called the company several times. “They finally admitted they didn’t have the door done,” Cooper said. “The frame was supposedly done, but they didn’t have any of the hydraulics, motors or switches. They also told me they didn’t have the money to ship the door.” Cooper offered to hire a private trucker to go pick the completed frame up and deliver it to him without any of the hydraulics, motors or switches. “They never responded to my request,” Cooper said. “I doubt they ever had the frame completed. They were just stringing me along.” Cooper is left in the same situation many others are in. “I tried contacting the Attorney General in Minnesota, but they said fraud is really hard to prove,” he said. “I'm looking for sort of recourse against (Hydroswing), but like a lot of people, I don't think I’ll ever see a penny.” Editorial note: This reporter tried several times to contact the company, but attempts were unsuccessful. In addition, several attempts were made to contact workers. Again, no reply.