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A defense contractor that cut corners now struggles to pay its bills
LAW
BRANCHBURG-Parmatic Filter Corp., a defense contractor that last fall pleaded guilty to defrauding the government and agreed to pay more than $8 million in restitution and fines, now finds itself in a financial vise.
Parmatic makes air, oil and other filters used in commercial and military applications. It has 105 employees and posts about $10 million a year in sales, according to Hoovers, an industry and market information provider.
Parmatic admitted to taking potentially deadly shortcuts in a bid to save money on parts for military gas-mask filters that the Department of Defense ordered in 1996 and 1997, according to U.S. District Court records in Newark. Now "Parmatic is supposed to pay the fine and the restitution using money from its continuing operations," says attorney Chad Friedman, who represents the company in a Chapter 11 bankruptcy filing made Feb. 18 in U.S. Bankruptcy Court in Newark.
"The problem...