More than a month after Syroco Inc. stopped manufacturing injection molded patio furniture, the firm's assets are being liquidated under Chapter 11 bankruptcy proceedings.
The company, based in Baldwinsville, N.Y., filed for bankruptcy protection July 23 in U.S. Bankruptcy Court in Old San Juan, Puerto Rico.
Syroco's parent company, Vassallo Industries Inc., is headquartered in Ponce, Puerto Rico.
The company is seeking $45 million debtor-in-possession financing, according to Vassallo President Rafael Vassallo.
``We have stopped manufacturing,'' he said in an Aug. 2 telephone interview. ``But we're still shipping existing inventory.''
Vassallo has requested an orderly liquidation of all the assets, including real estate, machinery, tools, vehicles and inventory.
Bankruptcy documents reveal Syroco has been losing money for the past three years. Its loss for fiscal year 2006-07 was $7.9 million. For the fiscal year ended May 30, 2006, it lost $9.4 million.
Its 20 largest unsecured creditors include Larry Hardy of Beverly Hills, Calif., with a claim of $6 million; Huntsman Corp. of Salt Lake City, $683,500; Formosa Plastics Corp. of Livingston, N.J., $590,000.
According to bankruptcy filings, the losses pushed officials to decide June 15 to reduce operations to a minimum, eventually terminating operations and liquidating assets.
Vassallo said Syroco did not react quickly enough to changes in the market. The North American market for injection molded patio furniture has dropped from about $300 million 10 years ago to about $125 million today.
``Basically, decisions that had to be made at a critical time were not made,'' Vassallo said.
The value of its assets, according to the bankruptcy filing, includes $12.4 million in real estate for sites in Baldwinsville; Geddes, N.Y.; and Siloam Springs, Ark. Machinery and equipment is valued at nearly $5.4 million. Its intangible assets, molds and tooling are valued at $7.2 million.
Vassallo said the state of Syroco does not reflect that of Vassallo Industries: ``The bankruptcy proceedings will not affect in any way the parent company. It has nothing to do with Vassallo Industries. Here, it is business as usual.''
Vassallo has begun to diversify into blow molded gas cans and trash cans, and has reached an agreement with a South African firm for rotational molded pallets.
``We're still growing here,'' he said. ``In general, we're doing great.''
Syroco's first meeting of creditors will be held Aug. 31, according to court documents.