RathGibson Files for Chapter 11 Bankruptcy Proceedings
07/14/2009 - RathGibson and its domestic affiliates begin reorganization proceedings under Chapter 11 of the United States Bankruptcy Code.
RathGibson, Inc. and its domestic affiliates have begun reorganization proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
Along with the Chapter 11 filing, RathGibson also has filed a proposed plan of reorganization that provides for holders of allowed general unsecured creditors to be unimpaired and paid in full on undisputed amounts owed prior to the bankruptcy filing.
If consummated, the plan will significantly reduce the company's debt burden. The company said its plan has the unanimous support of its prepetition secured lender, Boards of Directors, and the company’s management leadership, as well as certain key noteholders.
"The current management team inherited a significant debt load that cannot be sustained, particularly in these challenging financial markets," said Mike Schwartz, President and CEO of RathGibson. "As a result, we must take action to position the company for the future."
"No one should be confused about what a bankruptcy process means for RathGibson,” continued Schwartz. “Following a record year of performance in 2008 for RathGibson and the industry, we are experiencing demand levels reduced by 50%. This reduction in demand combined with our leveraged position necessitates this action. We will emerge from this process stronger than ever."
Schwartz noted that the Chapter 11 filing should have no impact on day-to-day operations. “We have, subject to bankruptcy court approval, which we expect to obtain, secured ‘debtor-in-possession’ financing which will provide the company with sufficient liquidity to continue normal operations during this transition period,” explained Schwartz. “Our brand, our products, our quality systems and our people remain strong. This process is strictly a financial restructuring of our debt.
“We are fully committed to ensuring that our valued customers and channel partners are not affected by this restructuring process,” continued Schwartz. “During this period, we will work even more closely with our customers, channel partners, vendors, suppliers and employees to deliver the same level of service they expect and deserve from RathGibson. I remain thankful for the steadfast support of our employees and other stakeholders throughout this entire process, and I am confident in our ability to expand and pursue new opportunities for the RathGibson brand.”
“We are fully committed to ensuring that our valued customers and channel partners are not affected by this restructuring process,” continued Schwartz. “During this period, we will work even more closely with our customers, channel partners, vendors, suppliers and employees to deliver the same level of service they expect and deserve from RathGibson. I remain thankful for the steadfast support of our employees and other stakeholders throughout this entire process, and I am confident in our ability to expand and pursue new opportunities for the RathGibson brand.”
RathGibson is an international manufacturer of highly engineered stainless steel, nickel, and titanium tubing for diverse industries. Its corporate headquarters are located close to Chicago in Lincolnshire, Ill., and its manufacturing locations include Janesville, Wis.; North Branch, N.J.; Clarksville, Ark. (Greenville Tube); and Marrero, La. (Mid-South Control Line). In addition to sales offices in Janesville, North Branch, and Marrero, RathGibson has also strategically placed sales offices in Houston, Texas; Shanghai, China; Manama, Bahrain; Melbourne, Australia; Seoul, Republic of Korea; Mumbai, India; Singapore; Vienna, Austria; and Buenos Aires, Argentina.
