Bank of America is in the midst of returning molds to Cowan Plastics Inc.’s customers, collecting accounts receivable and reviewing the company’s financial books and records.
Peter Furness, a lawyer with Brennan, Recupero, Cascione, Scungio & McAllister LLP in Providence, who represents Cowan Plastics, said that Bank of America notified the Providence company of its plans to shut the company down and take possession of its assets on the morning of Sept. 12.
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Furness said the company owed the bank more than $1 million.
Bank of America spokeswoman Shirley Norton said she couldn’t comment, because information about the bank’s relationships with its customers is confidential.
Cowan Plastics, which describes itself as the oldest injection molder in Rhode Island, is based in a 40,000-square-foot refurbished 19th-century mill on Manton Avenue. It also has a 60,000-square-foot assembly facility in Warwick.
The company has no proprietary products, but has rather built its business as a manufacturer and assembler of other company’s products, including the well-known Mosquito Magnet, for American Biophysics Corp. of North Kingstown. Other major clients listed on the company Web site include Waring/Conair Corp., Titleist, Oral-B/Gillette, Boston Scientific, Holmes and Zodiac.
Asked why the company, founded in 1946, had defaulted on its loan agreement, Furness said that Cowan Plastics had been “a profitable and positive-cash-flow company up until last year.” He would not comment on the cause of the change.
The company was purchased in 2001 by Richard Oster, former CEO of Cookson Group PLC. He could not be reached for comment.
Cowan Plastics employed 170 people in 2002, according to a June 24, 2002, article in the trade journal Plastics News. When the company shut down in mid-September, it employed fewer than 23 people, Furness said.
Bank of America could sell the company’s assets, which include machinery, equipment and furniture fixtures, to a third party or at public auction, but Furness said he has not heard a decision from the bank’s lawyer. That lawyer, Steven Greene of Riemer & Braunstein LLP in Boston, also could not be reached for comment.
“They will sell in any manner commercially reasonable,” Furness said.
All proceeds of the sale will go toward repaying the debts the company had incurred with Bank of America, he said; Cowan Plastics’ “many other creditors” will receive nothing from the sale of assets. “To my knowledge, they have not filed for anything.”
