Firm admits reducing ‘head count' at Calexico Tissue Co.

December 17, 2001|By AARON CLAVERIE, Staff Writer

CALEXICO — On Dec. 7, the "head count" at Calexico Tissue Co. was reduced, according to Dale Marcus, a partner at Brent Kugman and Associates.

Kugman's Chicago-based firm employs "turnaround specialists" who are managing the bankruptcy proceedings of Calexico Tissue's parent company, American Tissue Inc.

American Tissue filed for bankruptcy on Sept. 10.

Shortly after taking control of the embattled company in October, Kugman began liquidating assets to pay almost $140 million in debt — including $300,000 owed the city of Calexico.

Kugman "reduced the headcount" — translation, laid off employees here — by shutting down the converting capacity at Calexico Tissue's Portico Boulevard plant.

Marcus said the workers who were laid off ran the equipment that converted huge jumbo rolls of paper to finished tissue products.


He said a small number of employees have been retained.

Marcus said he did not know how many have been laid off or retained. Calexico Tissue plant manager Javid Nassir said he couldn't comment.

Former plant employees said 70 to 100 people were laid off.

Marcus said it is possible some of those who have been laid off will be called back to work if the plant's production facilities start operating again. He did not say when his company would make a final decision on the plant's viability.

"I don't know the exact date. We hope to know as soon as possible," he said.

When Marcus was asked if former employees of Calexico Tissue should look for new jobs, he said, "There are too many issues. I don't want to mislead somebody.

"We are optimistic (about the prospects for the Calexico plant) but nothing has been decided. The company is reviewing all its strategic options," Marcus said.

In August the Calexico City Council, seated as the RDA board, loaned Calexico Tissue $360,000 for expansion.

The money has not been paid back, according to City Attorney Michael Rood.

Mayor Victor Carrillo said in the future city leaders will thoroughly inspect the financial history of any company to which it loans money.

"We have to check their credit history and backgrounds," he added.

In 1998 the Calexico RDA loaned Calexico Tissue Co. $900,000 to build a 200,000 square-foot facility on Portico Boulevard. That money has been paid back.

The RDA director at the time, Oscar Rodriquez, called the multi-million dollar warehouse and processing facility on Portico Boulevard "the flagship for industrial development in Calexico."

American Tissue had 4,200 employees and holdings in 19 states at the time of the Sept. 10 filing. Thousands of employees throughout the country have been laid off during the company's ongoing bankruptcy proceedings.

American Tissue is one of the country's largest paper companies, producing private label and branded facial tissues, napkins, towels, bathroom tissues, paper plates, table covers and special occasion printed paper products.

>> Staff Writer Aaron Claverie can be reached at 337-3419 or

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