S-K Tools Files for Bankruptcy

SK Hand Tool assets sold to Ideal Industries
By: Lorene Yue August 23, 2010


(Crain's) — SK Hand Tool Corp.'s brand name has been sold to Ideal Industries Inc. through a bankruptcy auction.


Sycamore-based Ideal Industries Inc. was the highest bidder for some SK Hand Tool assets, which were put on the market after the company sought Chapter 11 bankruptcy protection in June.


SK Hand Tool, which was founded in Chicago in 1921, will become a subsidiary of Ideal Industries, which manufactures tools for the electrical industry.


Doug Spitler, a vice-president at Ideal, will head up the SK Hand Tool division.


The deal, worth more than $3.5 million according to bankruptcy documents, is scheduled to be approved by a bankruptcy judge on Wednesday.

Ideal Industries will decide within 30 days after the closing if it will manufacture SK Hand Tool products at one of Ideal's existing plants or build a new facility, the company said in a statement.


The purchase of SK Hand Tool's assets did not include any employees, plants or real estate, an Ideal Industries spokesman said.


SK Hand Tool is the third acquisition Ideal Industries has made this year. Ideal earlier purchased Western Forge of Colorado and Pratt-Real Tools LLC of Connecticut.


SK Hand Tool was hit hard by the economic recession and at one time owed its primary lender roughly $9 million.

The manufacturing firm stopped offering health benefits to its workers last summer, a move that prompted 70 union workers from Teamsters Local 743 to go on strike.

At the time, SK Hand Tool officials said the company was unable to control the factors that led to its inability to offer health insurance. By the time SK Hand Tool filed Chapter 11 bankruptcy, its plant in Defiance, Ohio, had ceased operating and only a few workers were left in its Chicago facility.

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