Bag maker Uniflex Inc. has entered Chapter 11 protection from creditors in a continuing effort to wipe out a mound of debt accumulated when the company was taken private five years ago.
The Hicksville, N.Y.-based firm has taken some steps already. Uniflex replaced management and brought in a turnaround firm, New York-based Corporate Revitalization Partners LLC, to improve operations and consolidate facilities.
However, the company has not been able to shrink more than $13 million in secured debt owed to its banks, plus $10.2 million due to Honeywell International Inc., according to Uniflex's June 24 bankruptcy filing in Wilmington, Del.
Uniflex was traded on the American Stock Exchange until June 1999, when New Canaan, Conn.-based equity firm RFE Investment Partners LP and top managers acquired the company. The deal led to debt levels that could not be reduced, said Mark Censits, a partner with the turnaround firm who had served as interim chief operating officer.
``Aggressive growth rates were assumed,'' Censits said in a June 25 telephone interview. ``The assumption was that volume and price would grow at the highest point. We've had some retrenchment in both areas.''
The economic downturn lowered those projections, said Hy Brownstein, Uniflex president and chief executive officer. The company, which recorded $38 million in 2003 sales, closed a plant in Albuquerque and a warehouse in New York, and consolidated manufacturing in Westbury, N.Y.
The company will operate as usual during the filing, Brownstein said. The company converts and prints bags for promotional, heath-care and cosmetics uses, employing 268. It also distributes paper bags.