By all accounts, few saw it coming. On January 9, ImagePoint, a 65-year-old Knoxville, TN-based quantity-sign manufacturer, closed its doors. A former ImagePoint manager told me only five or six people had prior knowledge. Gone were 270 Knoxville jobs and another 180 at the ImagePoint branch in Florence, KY (near Cincinnati). A January 10 article in the Knoxville News Sentinel spawned 90 online comments from ImagePoint managers and other employees, as well as unpaid installers.
Yet one observer claims the closing could easily have been prevented, but Wachovia spurned an offer from Navigation Capital, an equity firm, according to its founder, Larry Mock (an ImagePoint board member). In his January 11 blog, entitled “Why Wachovia Deserved to Die,” Mock said Wachovia (which was being acquired by Wells Fargo) liquidated ImagePoint’s assets even though “Navigation (and others) offered to put in $10 million of equity and $3 million in a standby debt facility.” He also wrote, “[Wachovia] bounced the checks the company had issued, [ImagePoint] thinking it had $6.5 million in available funds.”
ImagePoint retained 50 people to close out current business and the liquidation process. Meanwhile, some high-level skills wouldn’t be idle long.
An ImagePoint manager asked rhetorically in the Knoxville paper, “Why would another company buy ImagePoint when they could wait a week and just hire the talent that they wanted? Why take on $52 million in debt?”
The morning ImagePoint closed its door, Blair Companies Inc. (Altoona, PA), a $440 million firm (of which approximately 20% is signage-related), began interviewing key ImagePoint personnel.
“By the end of the first day, we’d decided to seek out and hire three to four key engineering people,” said Philip Devorris, Blair’s president and CEO. Even though Blair only sought “A” players, “we expanded our list to 30 to 40 within a week,” he added. The 40 people hired included “key engineers from the Florence plant that designed and prototyped the vast majority of ImagePoint’s products over the past 15 years.”
Additionally, “We’ve established a large office on the ground floor of ImagePoint’s former Gay St. office for Blair’s Knoxville Business Unit,” Devorris said.
Somewhat concurrently, ATR Industries (Greeneville, TN) announced it had merged with Blair and would become known as Blair Composites. A March 5 article in The Greeneville Sun reported, “ATR had previously been making fiberglass signage for McDonald’s, Hardee’s, Ford and General Motors. The signage was sold to ImagePoint.” In the article, Bobby Link, an ATR co-owner, said, “Blair Composites will continue to make the same general fiberglass products.” Devorris didn’t disclose if Blair had secured any ImagePoint clients.
Yet Blair isn’t the only “new” Knoxville sign company laden with former ImagePoint employees. On January 12, Principle Group, a $50 million U.K.-based company, announced its formation of Principle Group USA, empowered by 22 former ImagePoint employees, primarily program managers, in addition to Mark Deuschle, who serves as Principle USA’s CFO. Although some blogs implied ImagePoint CEO Jim Martin has ties with Principle, a Principle source emphatically told me “no.”
Principle and ImagePoint had worked together for at least four years. Essentially, Principle assisted ImagePoint with European projects, and ImagePoint helped Principle with U.S. ventures. A Knoxville TV station reported on February 13 that “Principle has picked up big names like Xerox, Hardee’s and ITT.”
But what about the other 330 or so ImagePoint employees? On January 17, former employee Rebecca Heifner filed suit in federal court, seeking 60 days of back pay and benefits, citing the Worker Adjustment and Retraining Act (WARN). On March 12, ImagePoint claimed exemption because it had been trying to raise capital.
And many other companies were awaiting capital. Three local end users filed a petition March 17 to force ImagePoint into Chapter 7 “involuntary bankruptcy.” CMH Homes, Knoxville Canvas Crafters and Asen Advertising and Marketing say they’re collectively owed more than $1.8 million. In the Knoxville newspaper, a former ImagePoint employee wrote, “Two vendors that I work with daily are owed over a million dollars. The one company might have to close because we were 80% of their business.”
Attorney Greg Ferguson (Aulakh Ferguson LLP, Setauket, NY) has taken on a dozen ImagePoint-related clients and helped approximately half of them recover amounts ranging “from a few hundred dollars to more than $50,000.” He added, “I don’t even try to get money from ImagePoint. I go to the companies who received the work, mostly national retail stores and vehicle dealerships.”
We will have a followup article in the June issue.