Giannoulias Steps into Hartmarx Fray

By Kevin Robinson in News on May 8, 2009 5:40PM

While Hartmarx employees were holding vigil outside of the Des Plains plant that makes the President's suits, State Treasurer Alexi Giannoulias was putting Wells Fargo on notice that their future business relationships with the State of Illinois could be in jeopardy. That's because Wells Fargo holds the majority of the bankrupt clothier's debt and is reportedly leaning toward liquidating the company's assets, recouping their funds quickly, but throwing over 3,000 people out of work. "Unless the company remains open, [Wells Fargo] will not be doing business with the state of Illinois any longer," Giannoulias told workers outside the plant.

He also sent a letter to Wells Fargo officials, informing them that the financial institution will become persona non grata in the state unless they work to keep jobs in the state. “I am writing to inform Wells Fargo that the company’s intention to liquidate Hartmarx rather than allow a sale to buyers intent on keeping the company running will significantly jeopardize the business relationship between Wells Fargo and the state of Illinois,” he said in the letter. Wells Fargo is the state treasurer's money custodian, holding the department's cash and assets. The bank holds $100 million of Hartmarx's debt as part of the bankruptcy.

Three companies are bidding to take over the company, two of which would keep Hartmarx's operations largely intact. Keeping Hartmarx's operations running in the United States could mean that Wells Fargo, which took $25 billion in taxpayer funds as part of the Troubled Asset Recovery Program, may have to wait longer to recover its funds. A bankruptcy judge will have to approve any sale of the company's assets.