Resin distributor and reseller Thornton & Co. Inc. has reached an agreement with its main bank.
The company had filed for Chapter 11 protection from creditors on Aug. 10. That process will continue, but the agreement may be good news for Thornton's unsecured creditors — including resin companies.
People's United Bank “is going to let us do our thing for the next several months and sell down inventory,” Thornton Vice President Jake Thornton said by phone Sept. 3.
“We can sell it better than anyone [the bank] could bring in to liquidate,” he added.
In the Aug. 10 filing for Chapter 11, Thornton had cited a significant drop in petrochemical prices in late 2014 and early 2015 as a reason for the bankruptcy. Those price drops caused Thornton's sales totals to decline by 20 percent. Southington, Conn.-based Thornton has annual sales of about $200 million.
People's United — based in Bridgeport, Conn. — had rejected a proposed repayment plan. Bank officials could not be reached for comment on the new plan.
Thornton has retained Gordian Group LLC of New York as its financial adviser. The firm's largest single unsecured creditor is Formosa Plastics Corp. USA, which is owed almost $2.1 million. Westlake Chemical Corp. is owed more than $2.2 million through two separate units.
Thornton is continuing with a complaint it filed against People's United on Aug. 24. In the complaint, Thornton makes several claims against the bank, including that it failed to understand Thornton's business and that it tried to sell the firm to competitor Ravago Americas of Orlando, Fla.
Officials with Ravago could not be reached for comment.
The complaint also lists Thornton's resin inventory balances as of Aug. 14. On that date, the firm had almost 18 million pounds of polyethylene, polypropylene, polycarbonate and polystyrene resin valued at almost $11.6 million. Thornton's largest single item was 9.1 million pounds of off-grade PP worth almost $5.7 million.
In spite of his firm's recent struggles, Jake Thornton was upbeat. “Every day is a little brighter,” he said. “There's definitely life after bankruptcy.”
Other top unsecured creditors include Equistar Chemicals LP, at more than $1.3 million, and Chevron Phillips Chemical Co. at just less than $1 million.
Thornton's annual resin sales total more than 300 million pounds, mostly in prime and off-grade PE and PP.