U.S. Plastic Lumber Corp. could sell part or all of its assets as it reorganizes under Chapter 11 bankruptcy protection, according to consulting firm Triax Capital Advisors.
The Boca Raton, Fla.-based profile extruder filed for Chapter 11 protection from creditors July 23 in U.S. Bankruptcy Court in Palm Beach, Fla. The firm is seeking a court order to obtain debtor-in-possession financing to support current operations, officials said in a July 23 news release. That financing would be secured by the company's accounts receivables, inventory and physical assets.
``Given our company's current condition, we believe that this action will give us the ability to preserve and maximize our value,'' said Michael Schmidt, USPL's chief financial officer.
USPL officials had warned earlier this year that the firm might need to file for protection. In that April 14 filing with the Securities and Exchange Commission, officials said the company was not in compliance with the terms of a loan from General Electric Capital Corp. and other lenders. USPL was unable to file its 2003 annual report because its audit had not been completed.
``The company is working closely with its senior lender and other creditors and, with the breathing room afforded by Chapter 11, it will be able to successfully reorganize its operations and emerge quickly from bankruptcy,'' said Joseph Sarachek, managing partner with Triax, the New York turnaround firm hired by USPL.
Saracheck said the reorganization could involve the sale of some or all of USPL's assets. He wrote in a July 26 e-mail that there is a deal to purchase USPL's resin recycling facility in Chino, Calif. According to an SEC filing from July 9, that facility was collateral on a $7.1 million loan agreement with Ampac Capital Solutions LLC of Nevada, and USPL agreed to turn over that property to Ampac.
