Sale of Jore Corp. becomes done deal

Pasco, Wash., company finalizes $32.9 million purchase of Ronan toolmaker

RONAN – The long saga of the Jore Corp. bankruptcy came to an end Wednesday afternoon in the
offices of a Seattle law firm. Now, the company foresees a "very bright" future as it continues to
manufacture tool accessories.

By JOHN STROMNES of the Missoulian

The sale of the Ronan business was finalized 10 days after the company was purchased for $32.9
million at a bankruptcy auction in Missoula, and two days after the final closure date was approved
by the bankruptcy court.

A spokesman for the new owner, Western Mortgage and Realty Co. of Pasco, Wash., said the firm
will continue to be called Jore Corp., since the rights to the name were bought as part of the
purchase agreement. Lawyers had referred to it as "New Jore" earlier in court proceedings.

A press release Wednesday afternoon from Jore said Western Mortgage and Realty Co., owned by
Frank Tiegs and Tim Tippett, had purchased the firm. Tiegs and Tippett are Pasco businessmen who
have been closely associated in recent years in potato-processing and real estate enterprises in the
Tri-Cities area of Washington and in potato-growing regions of Oregon.

Jore Corp. is expected to continue operating, a company official said.

Gerald McConnell, president of Jore during the 11-month Chapter 11 bankruptcy, said the company
"continues to enjoy record growth in sales and earnings."

A Chapter 11 bankruptcy protects a firm from creditors and allows it to seek a sale, restructuring or
other resolution of the bankruptcy while it continues in business.

"Now that the company is out of Chapter 11 and properly capitalized, the future looks very bright for
the company," McConnell said.

The $32.9 million in notes and cash is the estimated price entered at auction April 15 in Missoula.
Pentair Corp., a major national tool manufacturer, was the other bidder. Pentair offered about $26
million in cash.

Tiegs, reached by telephone Wednesday evening in Pasco, said he would have no immediate
comment on his plans for the company, which employs almost 300 people full time in the Mission
Valley manufacturing power tool accessories and drill bits.

Jore, formed in the 1980s by brothers Mike and Matt Jore of Ronan, continued to operate through the
Chapter 11 bankruptcy period on "debtor-in-possession" financing supplied by Wells Fargo Bank.
Wells Fargo ceased that financing after the sale last week. Using current cash flow, Jore has
remained open during the last 10 days while financial details of the closing were worked out. One of
the conditions of the sale was that it would remain a going concern until the sale was completed.

That closing was first scheduled for last Friday, then for Monday, but final closing was delayed until
Wednesday because of the complexity of the sale, and the need to work out last-minute details of
financing, assumed contracts and tax issues, people familiar with these details said.

U.S. Bankruptcy Judge Ralph Kirscher of Butte approved the sale late Tuesday as it related to buyer
and seller, but details about the other financing entities remained to be worked out, delaying final
closing of the sale, a court spokesman said.

One issue remaining is how Jore will pay the numerous lawyers and other professionals who were
involved in the case. These fees, which amount to millions, are normally "carved out" from the assets
of the bankrupt firm prior to sale and distributed according to a court-approved plan. But no plan was
presented to the court in this case. The claims by lawyers and other professionals will have to be
resolved later by Kirscher, a court spokesman said.

The bankruptcy case dragged on for months because of the huge debt owed to numerous creditors.
Some $90 million was owed to 267 secured creditors when the case started. When it was resolved,
some 16 creditors were owed about $70 million. Several creditors agreed to accept millions in loans,
rather than cash, in order to secure the sale to Western Mortgage.

An agreement on the sale needed to be reached by April 15, Kirscher said, or he would dismiss the
case, sending the creditors to state court for relief.

That would have been a time-consuming and expensive process, which probably would have meant
closure and liquidation for Jore, and much less money repaid to creditors at liquidation auction
prices. With the sale and the continued operation of Jore, its customer base remains intact, and its
trained and experienced employees are still on the job.

Kirscher’s threat appeared to have its intended effect, since the bankruptcy case was swiftly
concluded in less than eight hours by the sale to Western Mortgage, a firm which appeared in the
final days to make an offer to rescue Jore.

Now that Jore Corp. has been sold, a separate entity, consisting of some assets that were not a part
of the bankruptcy sale to Western Mortgage and Reality, will be liquidated over the next several
months, a company spokesman said.

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