In many Chapter 11 filings in Pennsylvania or other jurisdictions, the main focus of the company will be to get over the preliminary hurdle of being able to continue operations as the bankruptcy goes forward. In a recent filing by Vertellus Specialties, Inc., the company received the approval of the Bankruptcy Court to maintain its normal operations. The company has agreed with its lenders to sell substantially all of its domestic and foreign assets.
Apparently, the company will combine new debtor-in-possession financing of about $110 million with its normal operating income to stay afloat as it arranges to sell off assets. The company announced that employees will receive their earnings, benefits and reimbursements going forward. The CEO of the company called the plan an important step in the goal of becoming a stronger company, leaving no doubt that it intends to reorganize and not liquidate.
Vertellus reportedly has about 1,000 employees worldwide. Its base of operations in is Indianapolis, but it has 17 locations around the world. The company makes and sells specialty chemicals for numerous different uses in several different industries and sectors of the economy. It purchased a chemical manufacturing subsidiary from Dow Chemical, which may be a factor in slowing the cash flow of the company.
The reorganization process in Chapter 11 bankruptcy in Pennsylvania and other jurisdictions is a complex process that must be guided through the Bankruptcy Court by a skilled and experienced business bankruptcy attorney. There are negotiations and interactions with creditors and potential investors that are crucial to the success of the company. Numerous competing interests may be positioning themselves to take an interest in the company or to force its liquidation. Experienced and seasoned counsel is the most important asset that a company can rely on during a complex business bankruptcy.
Source: insideindianabusiness.com, “Vertellus Bankruptcy Proceeds“, Dan McGowan, June 2, 2016