Jun 11, 2014 2:24 PM by Tina Marie Macias
New Century Fabricators is closing at the end of this week, and its future is up in the air.
The New Iberia oilfiled company filed for bankruptcy late last month. New Century Fabricators employs 300 people and owes more than $2.4 million to other companies and contractors, according to court documents.
Control of the company was taken away from owner Jim Castille shortly before the bankruptcy filing. Its largest lender, First Capital, has a restraining order out against Castille and his son, Brennan Castille, stopping them from accessing New Century's accounts. The court appointed a third party to run the company in light of the financial state.
Castille said he's working to regain control of the company and eventually implement an reorganization plan. He said he wants to eventually reopen the company.
"My goal is take care of my employees and to get the creditors paid and a plan of reorganization to pay our creditors back," Castille said. 'We have a plan to rebuild and to start hiring. We will be employing people and rebuild our company back up to the staff levels it was at."
The restraining order against Castille came from allegations of fraud on the Castilles' part. First Capital claims New Century overstated the size of its account and company worth to "camouflage the funding of covert payments to or for the benefit of members of the Castille family." New Century billed about $150,000 in personal expenses for members of the Castille Family under the "New Century Shop Improvements" account, First Capital alleges.
By saying the company was worth much more than it is, it was able to fraudulently borrow more money from First Capital. It owes First Capital about $3.7 million above what it was actually eligible to borrow, First Capital alleges in court documents.
The lending company also alleges:
- New Century stated that its pending sales are $8.5 million, double the actual amount.
- New Century stated its total value as $3.9 million, but it's actually $500,000 in the red.
- New Century is so broke that "it is generally not paying its (bills) as they become due."
The court-appointed executive had to ask for permission to pay employees, but its budget only shows them paying for work through June 13, when current work will be completed. Another court date is set for June 19 in the bankruptcy hearing.