Moll Industries Inc.'s biggest blow came in 2006 when Whirlpool Corp. pulled $60 million in molding work. But what has pushed Moll into Chapter 11 bankruptcy protection now is a recent judgment for less than a million dollars, according to court documents.
Moll filed for voluntary bankruptcy protection April 27 in Delaware, after a sheriff locked up and posted for sale some equipment at Moll's injection molding plant in Seagrove, N.C., according to the filing. Moll said Invensys Controls won a judgment for $947,000, which resulted in the sheriff taking action.
Contacted May 12, Jeffrey Merritt, Moll's chief restructuring officer, said the plant is open and remains in operation. The factory employs about 125, the court filing said.
Merritt said Invensys Controls, a customer in Carol Stream, Ill., won the judgment several years ago in a legal dispute involving the closing of one of Moll's plants. “They were out trying to enforce their judgment,” he said.
Merritt has been on the job for a few months. “There are a number of options, including a sale,” he said.
In court documents, Moll said its sales plunged by about two-thirds, to less than $60 million, after it lost the Whirlpool appliance business in a dispute over pricing.
After losing that work, the company closed or sold several plants, and made a push into medical molding. Moll invested in clean rooms. But the debts piled up, and now Moll has just two plants, in Seagrove and in Donegal, Ireland. Both do medical molding.
In 2009, Moll generated sales of about $22 million, with about 75 percent of that coming from medical molding, according to court records. As of the Chapter 11 filing date, Moll had about $16 million in assets and $74 million in liabilities.
“By the beginning of 2010, the losses and subsequent negative cash flow generated over the past five years drained the company of liquidity,” Moll said in the Chapter 11 filing.
Although Moll's filing calls the Invensys Controls-driven sheriff's sale the “main problem forcing it into bankruptcy,” Moll also lists “a number of large liabilities stemming from divested operations the company cannot fund.”
A list of the 20 largest unsecured creditors — owed a total of $5.5 million — includes $3.5 million owed to Pension Benefit Guarantee Corp. for under-funded pensions, $282,831 for resin to PolyOne Corp., $129,529 for resin to Eastman Chemical Co., $48,592 to Negri Bossi USA Inc. for machinery, and $43,231 for resin to Sabic Innovative Plastics US LLC.
Moll also owes $93,288 to its owner, Dallas-based Highland Capital Management LP, for a corporate office lease.
A committee of unsecured creditors is scheduled to meet June 4, court documents said.
This marks the second time Moll Industries has faced bankruptcy. In 2002, Highland Capital Management forced Moll into Chapter 11 for being $48.4 million past due on loans. Moll emerged from that bankruptcy the following year, and Highland Capital became the owner.
Copyright 2010 Crain Communications Inc. All Rights Reserved.