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2 officers of shuttered company that hired Burke still on hook for $8 million

Laid off workers stage a sit-in at the Republic Window & Door Company 1333 n Hickory. The plant closed last friday and the workers have been there since asking for the benefits and payments that they have earned. Brian Jackson/Sun-Times

Four years after Republic Windows and Doors shut down, touching off a union sit-in that drew national attention, two former top officers of the company still face a court fight over accusations they wrongfully pocketed $8 million from the sale of Republic’s Goose Island factory to Wm. Wrigley Jr. Co. and schemed to avoid having to repay a city tax subsidy of more than $10 million.

While Republic was getting its tax subsidy from City Hall, it hired the law firm of Ald. Edward M. Burke (14th) to help cut its property assessment for its 2003 taxes, according to records that don’t show how much Burke was paid for his legal work.

Bankruptcy trustee Phillip Levey is suing former Republic owner Ronald Spielman and Richard Gillman, who was Spielman’s chief executive, as well as other former Republic officials in hopes of recovering millions of dollars to repay creditors including former employees and the Wrigley company, which was Republic’s landlord when it filed for bankruptcy at the end of 2008.

In federal bankruptcy court filings, Levey outlines a scheme by Spielman and Gillman to loot the company of its assets. According to Levey’s court filings, that scheme involved ensuring the company wouldn’t have to repay $10.4 million in a tax subsidy that City Hall gave it to build the $30 million factory and office building on Goose Island in 1996.

City officials say they don’t expect to recover any of the money Republic got from the city.

Spielman and Gillman sold the Goose Island property to Wrigley for $31.5 million in 2006. Republic then leased back part of the property until filing for bankruptcy in December 2008.

Today, the former Republic Windows factory at 930 W. Evergreen is an information-technology center for Mars Inc., the candy giant that now owns Wrigley.

A Cook County grand jury indicted Gillman on fraud charges in 2009. He remains free on bail, awaiting trial.

Spielman’s father, William Spielman, started Republic in 1964. By the mid-1990s, the company had outgrown its plant on Diversey and was looking into leaving Chicago when City Hall agreed to help fund the new factory, which opened on the North Side on Goose Island in 1998.

By 2005, Republic was $7 million in debt, and Ronald Spielman and Gillman sold the company’s only asset, the factory, to Wrigley, according to court filings by Levey that say they used most of the proceeds to pay off bank loans but that Spielman pocketed $6.2 million from the sale and Gillman got nearly $1.8 million.

Republic still owes Wrigley $590,000, according to court records.

Republic’s demise drew national attention as Gillman moved the company’s equipment to a factory in Iowa, and more than 200 workers occupied the building for days, demanding payment for severance and unused vacation days.