January 06, 2009 Plumbing business seeks protection By NEIL KIRBY
GLENS FALLS - A plumbing and heating business in the city that recently celebrated its 25th anniversary has filed for bankruptcy after losing a long legal battle with an ex-employee.
Russell Scudder, the former chief operating officer of Jack Hall Plumbing and Heating, was awarded nearly $230,000 from the business, court records show.
President Ty Hall said the settlement, which stemmed from a dispute over whether Scudder was fired fairly, was the primary reason for filing for Chapter 11.
Hall said Scudder wasn't performing up to company standards, so he was let go in early 1998, less than two years after he was hired.
Scudder and his attorney, Ronald Dunn, did not return calls seeking comment Monday.
The $229,159 settlement contributed to a debt of $1.3 million for the company, which has assets of about $453,000. Hall said a large portion of the debt was incurred when he bought the business from his father, Jack Hall.
The business, which was flush with cash only a few years ago, has fared worse as the economy sinks deeper into a recession.
"The Chapter 11 doesn't help the name," Hall said. "We never planned on something like this coming down the road."
The business laid off two of its 20 employees about a year ago, Hall said, and three more were laid off shortly after the bankruptcy filing.
Hall said no more layoffs were in the pipeline this year. He said the bankruptcy was more of a financial restructuring and that, if anything, it would result in a reduction of rates.
"We're still in business, and we're going to be in business still doing it as good as we always did it," he said, adding that the business might now consider more commercial projects in addition to residential work.
Jack Hall Plumbing and Heating services about 3,000 to 4,000 customers within a 25-mile radius of Glens Falls.
Chapter 11 of the Bankruptcy Code allows an indebted business to continue as a going concern as it works to pay back creditors.
