A local business has filed Chapter 11 to take advantage of the law’s provisions that allow it to continue operating while it reorganizes its finances. Edge Rubber is located in Chambersburg, and the filing occurred in the U.S. Bankruptcy Court for the Middle District of Pennsylvania. The company does recycling of tires. Its spokesman stated that the business hopes to come out of the bankruptcy in stronger shape and with a larger base of operations.
The spokesman stated that the company ran into a bad business relationship where it was defrauded in 2013. However, the prospects for the company’s business are strong for next year, according to the spokesman. He cited to at least two new substantial customers that are onboard for next year.
The company stated that it chose bankruptcy as a necessary step in returning to normal operations. It pointed to the internal stability of the company and reported that it has never laid off any groups of employees. In fact, it intends to go forward with new hiring and asserts that it did not lose any of its existing customers as a result of its difficulties or the bankruptcy filing. The filing lists about $2 million in unsecured debt to a variety of creditors and some $6 million of secured debt owed to a bank.
The company reportedly has 51 employees, and it requested permission from the Bankruptcy Court to continue paying employees in order to remain operating. Because equipment for recycling of tires is central to the business, the company’s operating efficiency may have decreased over an extended period due to receiving defective machinery important to the tire grinding process. The Chapter 11 bankruptcy proceeding will require the company to file a plan setting forth its intent on how to handle and reorganize its debt load going forward. Experts report that the financial outlook in the recycling industry, nationwide and in Pennsylvania, is strong.
Source: publicopiniononline.com, “Edge Rubber seeks bankruptcy protection“, Jim Hook, Dec. 28, 2015