Derek Wachob and Paragon Industries: A Sapulpa Community's Concern

It's been a rough time for a lot of people in Sapulpa lately, and it all seems to center around Paragon Industries. This company, which used to be a big deal around here, is now facing some serious financial trouble. We're talking about bankruptcy, lots of debt, and a whole lot of questions about how things got this way. Derek Wachob, who's been running the show, is at the heart of it all, and folks are really worried about what this means for their jobs and the town.

Key Takeaways

• Paragon Industries has filed for Chapter 11 bankruptcy, revealing significant financial problems and a large number of creditors. The company's future is uncertain, with options ranging from selling it as a whole to liquidating its assets.

• Derek Wachob, the head of Paragon Industries, has provided testimony regarding the company's operations, employee numbers, and debts. There are discrepancies between his statements and court documents, particularly concerning employee counts and the company's financial obligations.

• The court is actively involved in overseeing Paragon Industries' situation, appointing a Chief Restructuring Officer to manage the company. There have been disputes, especially regarding payments to family members employed by the company.

• The community is feeling the impact of Paragon's financial woes, with concerns about job losses and the effect on the local economy. Many employees are facing financial hardship due to the situation.

• Numerous lawsuits have been filed against Derek Wachob and his various entities, adding complexity to the bankruptcy proceedings. The court is working to sort out these legal battles and determine how to handle claims from different stakeholders, including trusts.

Paragon Industries Faces Financial Scrutiny

It's been a rough patch for Paragon Industries lately. The company recently filed for Chapter 11 bankruptcy protection, which basically means they're trying to reorganize their finances and debts. This filing happened back on May 21st in the U.S. Bankruptcy Court for the Eastern District of Oklahoma. From what we can gather, Paragon is looking at a pretty big financial hole, with both assets and liabilities potentially in the range of $100 million to $500 million. The good news, if you can call it that, is that the filing suggests there might be some money left over to pay back creditors who aren't secured by any specific assets.

Chapter 11 Filing and Financial Disclosures

So, the big news is the Chapter 11 filing. This is a big deal for any company, and it signals some serious financial trouble. It means Paragon is under court protection while it tries to sort out its money problems. The court documents are starting to reveal just how deep these issues go. We're talking about a lot of money owed to a lot of different people and businesses.

Creditor Concerns and Legal Representation

As you can imagine, when a company files for bankruptcy, all the people and businesses it owes money to (the creditors) get pretty concerned. And boy, were there a lot of them at the recent court hearing. It sounds like the courtroom was packed with lawyers, each representing different creditors. We're talking about companies like Edgen Murray LLC, CTAP, Sooner Pipe, Simtex, and even banks like Amarillo National Bank and Byline Bank. There were also entities like the Muskogee City-County Port Authority and even trusts, like the Wachob Irrevisible Trust, all wanting to know what's going on with their money.

Company Valuation and Liabilities

Figuring out exactly what Paragon Industries is worth, and how much it owes, is a huge task. The initial reports suggest a massive amount of debt. The company's financial situation is complex, with numerous claims from various creditors. It's going to take a lot of work to untangle all the liabilities and figure out a fair way to handle them. The court will be looking closely at everything to get a clear picture of the company's true financial standing.

Derek Wachob's Role and Testimony

Derek Wachob, as the CEO of Paragon Industries, found himself at the center of intense questioning during court proceedings. His testimony provided a glimpse into the company's operational status and financial entanglements.

Employee Numbers and Operational Capacity

Wachob stated that Paragon Industries had 74 employees remaining, though court documents indicated a lower figure of 59. When asked about the necessity of the current workforce, he expressed concern that further reductions would hinder the company's ability to restart operations. He confirmed that the remaining employees were actively working and that the company was current on payroll.

• Hourly Payroll: Approximately $40,000 per week.

• Salaried Payroll: Approximately $50,000 every two weeks.

He emphasized that any significant employee departures would bring the company's operations to a standstill.

Family Involvement in Business Operations

During his testimony, Wachob detailed the roles played by various family members within the business. This included his daughters, wife, mother, and son-in-law, whose salaries were a point of contention for several creditors.

Wachob's Testimony on Company Debts

Wachob addressed the company's financial obligations, mentioning

The Future of Paragon Industries

So, what's next for Paragon Industries? It's a big question, and honestly, nobody has a crystal ball. The main goal right now, according to those involved, is to try and sell the company as a functioning business, a 'going concern.' The idea is to get it back to making pipe, just like it used to. That's the first choice, the best-case scenario.

Selling Paragon as a Going Concern

If they can find someone willing to buy the whole operation, that's the preferred route. It means the business, or at least a significant part of it, could continue. There have already been people looking to buy it, either all of it or parts of it. If a suitable buyer comes forward with terms the court likes, they'll ask the judge for the go-ahead.

Potential for Company Rehabilitation

There's also the possibility of salvaging the company in a more structured way. Think of it like selling off a whole production line – raw materials in, finished product out. Someone who wants to make pipe could just buy that setup, move it, and get it running again. It's a way to keep more of the business intact than just breaking it down.

Asset Liquidation and Stakeholder Recovery

But what if a buyer for the whole thing doesn't pan out? Then, the next step is to "part it out." This means selling off individual assets, piece by piece. If even that doesn't work, the assets might just be sold for scrap, based on their weight. It's a spectrum of possibilities, really, from a full revival to just selling off the metal.

Here's a look at some of the potential outcomes:

• Sell as a Going Concern: The ideal scenario, keeping the business operational.

• Sell as a Unit: Selling off functional production lines or equipment.

• Liquidation: Selling individual assets or scrapping materials.

Legal Proceedings and Court Oversight

Court-Appointed Receiver's Role

The court has brought in a receiver to sort through the mess at Paragon Industries. This person's job is basically to figure out what assets the company actually has and what it owes to everyone. It's a big task, especially with so many different companies and lawsuits involved. The receiver has to look at everything, from the main company to other businesses Derek Wachob might have set up. They're trying to see if these other businesses can help pay off debts or if they're just more complications. It's like untangling a really knotted ball of yarn, and the receiver has to be careful not to make it worse.

Chief Restructuring Officer Appointment

To help get Paragon back on its feet, or at least manage the situation better, a Chief Restructuring Officer (CRO) has been appointed. This person is supposed to take charge of the company's day-to-day operations. Think of them as the temporary captain of a ship that's seen better days. Their main goal is to try and sell Paragon as a working business, known as a "going concern." This means keeping the factory running and selling the pipe it makes, rather than just selling off the pieces. The hope is that selling it as a whole will get more money for everyone involved.

Disputes Over Employee Compensation

One of the big sticking points in all of this has been paying the employees. There have been arguments about how much people should get, especially family members working for the company. Some creditors have raised concerns, questioning why family members are on the payroll and how much they're being paid. It's a sensitive issue because people rely on their paychecks, and when that's uncertain, it causes a lot of stress. The court has had to step in to try and sort out these payments, making sure things are handled as fairly as possible, even if it means some payments have to be made before other debts are settled.

Community Impact and Employee Concerns

It's tough seeing a local business go through such a rough patch, especially when it hits so close to home for so many people in Sapulpa. Paragon Industries has been a part of this community, and when things get shaky there, it doesn't just affect the folks inside the building. We're talking about jobs, livelihoods, and the general economic health of the area. It’s a real blow when people who have relied on those paychecks suddenly find themselves out of work.

Job Losses and Financial Hardship

The ripple effect of layoffs at a company like Paragon is significant. When employees lose their jobs, it's not just about missing a paycheck; it's about the stress of finding new work, potentially at a lower wage, and the uncertainty that brings. Many families live paycheck to paycheck, and a sudden job loss can create immediate financial hardship. It means tough choices about bills, groceries, and even basic necessities. The court-appointed receiver, David Rhoades, has acknowledged this, noting how difficult it is to mess with people's lives and their paychecks.

Impact on Local Economy

Beyond the direct employees, the local economy feels the pinch too. Think about the businesses that relied on Paragon employees spending their money – the local diners, the shops, the service providers. When those employees are struggling, that spending dries up, affecting other businesses and creating a broader economic slowdown. It's a chain reaction that can be hard to stop once it starts.

Concerns Over Family Member Salaries

There have also been questions raised about how family members are compensated and their roles within the company's operations. During testimony, Derek Wachob detailed the involvement of his family members. When a company is facing financial difficulties and laying off workers, any perception of preferential treatment or excessive compensation for insiders can understandably cause concern and frustration among the remaining employees and the wider community.

Financial Obligations and Outstanding Debts

Significant Loans and Creditor Claims

Paragon Industries is facing a mountain of debt, with numerous creditors lining up to recoup their losses. A significant portion of this debt comes from substantial loans, including a massive $80 million loan from the Wachob Irrevocable Trust (WIT). This trust is listed as a major creditor, with claims totaling $77.7 million. Beyond this, a host of other entities have filed claims, indicating a complex web of financial obligations. These include companies like Edgen Murray LLC, CTAP, Sooner Pipe, Simtex, LEP Paragon Holdings LLC, Amarillo National Bank, Muskogee City-County Port Authority, Byline Bank, and AM/NS Calvert LLC, among others. The sheer number of creditors suggests a widespread impact on businesses that had dealings with Paragon.

Utility Bills and Operational Expenses

While the larger loans and creditor claims paint a grim picture, Paragon also has more immediate operational expenses that are in arrears. Court documents reveal that the company owes OG&E, the local utility provider, a staggering $600,000. Derek Wachob initially downplayed these pressing bills, mentioning only

Legal Battles and Entity Structures

Multiple Lawsuits Against Derek Wachob Entities

It's not just Paragon Industries facing trouble; Derek Wachob has set up a bunch of different companies over the years. And guess what? A lot of those other entities are getting sued too. We're talking about lawsuits filed in different states, which makes things pretty complicated. The receiver, David Rhoades, mentioned that they might try to get these cases moved to Creek County, but that's kind of a last resort. The first plan is to work with the courts where the lawsuits are already happening to try and keep the impact on everyone involved as small as possible. It's like trying to untangle a really big knot.

Jurisdictional Challenges for Lawsuits

Dealing with lawsuits across different states is a headache, no doubt about it. Lawyers tend to cast a wide net when filing, sometimes including parties they aren't entirely sure about, just in case. For example, Amarillo National Bank was listed as a stakeholder in one suit, even though it seemed like Wachob hadn't pledged any assets to them. Apparently, the bank wasn't even sure where they stood in this whole mess of companies. They'll likely reassess their position as things become clearer. It's a bit of a legal fishing expedition, trying to figure out who owes what and to whom.

Inclusion of Trusts as Stakeholders

One of the tricky parts is figuring out if certain trusts, like the Wachob Irrevocable Trust, should be considered stakeholders. Right now, they aren't being included in the immediate receivership proceedings. This is mainly because there hasn't been enough investigation to determine if there's a solid reason to bring them into the picture. It’s a careful process, trying to make sure all the right parties are involved without overreaching. The goal is to get a clear picture of all the assets and liabilities before making any final decisions about who has a claim.

What's Next for Sapulpa?

The situation with Paragon Industries and Derek Wachob has certainly caused a stir in Sapulpa. With court dates, financial troubles, and many people's jobs on the line, it's been a tough time for everyone involved. The company's future is still up in the air, with options ranging from selling it off as a whole to breaking it down piece by piece. It's a complicated mess, and figuring out how all the money owed gets paid back is a huge puzzle. We'll just have to wait and see how things shake out for Paragon and, more importantly, for the people who worked there and the community that's been watching this unfold.

Frequently Asked Questions

What happened to Paragon Industries?

Paragon Industries filed for Chapter 11 bankruptcy. This means the company is in a legal process to reorganize its debts and finances, often with the goal of continuing to operate or selling its assets.

Why did Paragon Industries file for bankruptcy?

While the exact reasons are complex, the company faced significant financial challenges, including large debts and numerous lawsuits from various creditors. These issues led to the bankruptcy filing to address its financial obligations.

What is Derek Wachob's role in this situation?

Derek Wachob is a key figure associated with Paragon Industries. He provided testimony in court regarding the company's operations, employee numbers, and debts. His family also appears to have been involved in the business operations.

What happens to the employees of Paragon Industries?

The situation has led to job losses for many employees. Those who remained were evaluated based on their contribution to the company. The financial difficulties have caused hardship for many former workers.

How will creditors get their money back?

The court is overseeing the process to determine how money will be distributed. This could involve selling the company as a whole, selling off its parts, or liquidating assets to pay back those who are owed money.

What is the goal for Paragon Industries moving forward?

The primary goal discussed in court was to sell Paragon Industries as a 'going concern,' meaning the business would continue to operate. If that's not possible, the company's assets might be sold off separately.