Resin distributor and reseller Thornton & Co. Inc. has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, after a plan to repay suppliers was rejected by its primary bank.
The company said it will pursue “a partial orderly liquidation.”
Southington, Conn.-based Thornton — with annual sales of about $200 million — filed for Chapter 11 protection in Hartford, Conn., on Aug. 10, officials said in an Aug. 10 news release.
“We have decided that the best way to try and repay our creditors as much money as possible is under bankruptcy protection,” company President J. Paul Thornton Jr. said in the release. “We proposed a plan to our banking group, led by People's United Bank, which would have let us stay in business and recover from certain market events, but they rejected it.”
People's United is based in Bridgeport, Conn. Thornton officials said their plan was rejected by People's and by its partner bank, Farmington Bank of Farmington, Conn.
Thornton has retained Gordian Group LLC of New York as its financial adviser.
Thornton's annual resin sales total more than 300 million pounds, mostly in prime and off-grade polyethylene and polypropylene.
Paul Thornton cited “a significant drop” in petrochemical prices in the last year as a reason for the bankruptcy filing. That drop caused his firm's sales to fall more than 20 percent, he added, leading Thornton to deal with the resulting financial pressure by selling inventory on hand “at a significant loss.
“We are filing this case to try and bring value to our suppliers who have so generously supported us and worked with us,” Paul Thornton explained. “If we do just as People's Bank asks, our suppliers will get nothing.”
Thornton “will now likely undertake at least a partial orderly liquidation,” officials added in the release.
Paul Thornton founded the firm in 1994. His son Jake Thornton serves as Thornton's vice president. The firm had been on a growth curve in recent years, hiring several market veterans in early 2014 and embarking on a branding campaign.
In early 2014, Jake Thornton told Plastics News that the firm was looking to benefit from large PE resin capacity expansions that are set to come online in North American in the next few years.