Allegheny Wood Products, which abruptly ceased operations Feb. 23, is being sued for $40.5 million by United Bank, reported The Charleston Gazette-Mail.
The federal lawsuit filed on March 5 alleges that Allegheny Wood Products owes the bank that much in unpaid loans and seeks appointment of a receiver to control the defendants’ assets and operations.
United Bank says the defendants’ ceasing of operations and employee terminations came a day after United placed an administrative freeze on all their deposit accounts. The bank stated a receiver could use proceeds from collateral and other assets to satisfy related expenses, including secured debt United says the defendants owe to United.
The bank also says a receiver may also be able to sell portions of the defendants’ operations to third parties, which could be the only way to allow some of the companies’ workforce to return to employment.
This is the second lawsuit filed against the lumber producer since it closed. On March 1, a former employee filed a lawsuit in federal court seeking class-action status, unspecified damages and civil penalties. It alleges violations of the federal Worker Adjustment and Retraining Notification Act, also known as WARN, which requires companies to provide 60 days’ notice if they have at least 100 full-time workers. It also alleges violations of state wage payment law.
