Jeld-Wen, Steves and Sons Working on Long-term Supply AgreementMay 19th, 2022 by Travis Rains
Judge Robert Payne of the Eastern District of Virginia has granted a joint proposal for a long-term supply agreement with respect to Steves and Sons Inc. and Jeld-Wen, and the five-year legal battle between the two companies.
On Monday, May 16, the court modified a divestiture order that came out of a private merger challenge from Steves and Sons relating to Jeld-Wen’s Towanda, Pa., manufacturing facility. The original amended final judgment order dictated that Steves and the company acquiring the facility would enter into a three-year supply agreement.
However, Jeld-Wen sought a modification to that provision “to ensure that potential bidders in the divestiture process will understand fully the contractual obligations that the acquiring company will undertake …,” according to court documents. The amendment entails a three-year supply agreement not with Steves and the acquiring company, but Steves and Jeld-Wen. The agreement will then be assigned to the acquiring company once the divestiture transaction closes.
While Steves and Sons originally opposed the modification with a number of objections, that is no longer the case. In fact, Steves and Sons said such an agreement could see it withdraw as a bidder for the manufacturing facility so long as the action eliminates double marginalization.
“Because the parties have agreed that an expedited negotiation is reasonably likely to succeed, and because the satisfactory resolution of those negotiations would obviate Steves’ objections to the Special Master’s report and recommendations while also facilitating the bidding process for prospective buyers of Towanda, it is hereby ordered that the parties’ joint proposal to carry out expedited negotiations is granted,” the court wrote.
Also granted was a proposal from Steves and Sons that allows the special master to be available as a mediator. If the two companies cannot come to an agreement during negotiations, however, the matter will head directly to the court and will not see the special master make recommendations to the court. Those negotiations have a deadline of May 27, 2022. If the companies reach an agreement, documentation must be submitted to the court by June 6, 2022.
It was also ordered that the special master re-open bidding for the facility upon approval of a contract. The reopening of the bidding process will be followed by a report that recommends a buyer.