More than 94 percent of W. S. Lee & Sons, Inc.'s creditors have voted in favor of a reorganization plan allowing the company to emerge from bankruptcy.

The vote, which concluded Friday, will be one of the factors to be reviewed by U.S. Bankruptcy Judge Bernard Markovitz at a hearing April 6.

"The vote marks one of the final mileposts for us as we travel out of Chapter 11 and onto growing the company," Chief Executive Officer Robert S. Donaldson said Friday. "Over the past year, our goal has been consistent: preserve jobs and return to normal operations as soon as possible."

W. S. Lee, a 135-year-old fourth-generation food distribution company, filed for bankruptcy in March 2006 and initiated plans to reorganize.

That lead to negotiations with creditors, the sale of property and a new management team that excluded the founding family members.

As proposed, the plan calls for Donaldson to remain as chief executive officer and to be on a board of directors with Stephen Sheetz, chairman of the board of Sheetz Inc., and Donald Devorris, chairman of the board of The Blair Cos. Inc.

Sheetz and Devorris each provided $875,000 toward the company's reorganization.

While the management plan drew criticism in November from Robert E. Lee, who directed the company before bankruptcy, the proposed plan has drawn support from Walter J. "Jamie" Lee III, former company vice president.

"This is the best decision for the Lee family legacy, for company employees, the community and me," Jamie Lee said in a statement issued by the company. "I look forward to seeing the company that my great-grandfather founded return to being a profitable business and valued employer in central Pennsylvania."

Donaldson described the 94 percent vote as impressive, one that speaks to suppliers' confidence in the company.

"While the bulk of the ballots were from unsecured creditors [made up primarily of hundreds of suppliers to the company], other parties of interest were also given an opportunity to vote, such as the secured creditor Omega Bank," Donaldson said.

Donaldson said support from Omega, the company's largest creditor, is of paramount significance now and in the future.

Altoona Mirror 3/31/07
by Kay Stephens