Volume 44, Issue 12 - December 2009

NewsNow


Arch Aluminum & Glass Files for Chapter 11 Bankruptcy

Arch Aluminum & Glass Co. Inc. of Tamarac, Fla., filed for Chapter 11 bankruptcy on November 25 in the U.S. Bankruptcy Court for the Southern District of Florida. Days later the company announced that it had reached agreement to sell substantially all of its assets to an affiliate of Grey Mountain Partners LLC (GMP), a private equity firm in Boulder, Colo.

Arch’s chief executive officer, Leon Silverstein, commented on the sale, “This transaction gives Arch the ability to dramatically reduce its debt and emerge a stronger company. Arch will continue to buy goods and services from its vendors, support its work force and provide its customers with the same quality products and services they’ve come to expect from us. Our goal is to preserve and strengthen our business so that we can compete successfully in the future. We expect this transaction process to be completed very quickly.”

Silverstein assured customers and vendors that the company would not be closing.

“We are not going away,” said Silverstein in an exclusive interview with USGlass. “We are in the process of selling the assets and we will be out of bankruptcy in 45 days,” he continued. “We are not disappearing. The sad truth is that we have spent five months trying to work out our situation with our banks that have been impossibly difficult to work with.

“It’s not what we wanted to do,” Silverstein added, “but it’s the only way we can do it. We are going to emerge with 75 percent less debt. We did this because we had to do so to restructure our balance sheet.”

Among Arch’s unsecured creditors listed in the court filings are:
• Pilkington North America – owed $6,715,000.67
• Guardian Industries – owed $5,563,805.48
• PPG Industries – owed $1,968,148.89
• William Bonnell Co. Inc. – owed $1,660,044.43
• Zeledyne LLC – owed $1,405,266.20
• Solutia Inc. – owed $1,220,052.77
• Hydro Aluminum – owed $906,928.65
• Rockford Trading Co. – owed $845,660.17
• AGC Industries – owed $561,722.96
• C.R. Laurence Co. Inc. – owed $535,119.60
• Allmetal – owed $463,676.02
• Spraylat Corp. – owed $440,587.32
• Penske – owed $411,124.48
• Walker Glass Co. Ltd. – owed $326,471.17
• Ryder Truck Rental – owed $218,400.41
• Fenzi USA Inc. – owed $209,583.80
• Ir Security and Safety – owed $194,859.19
• Global Door Control Inc. – owed $158,258.91
• Lockton Cos. LLC – owed $156,734.00
• Industrial Control Development – owed $142,501.99

Silverstein said he anticipated little change at Arch. “We have done a tremendous job of cost cutting and we are performing well. We just could not overcome the amount of debt we had as we were a company built for growth.”

He added that there will be no employee changes at Arch and that the management team will remain in place. In addition, Silverstein noted that the bankruptcy filing does not include Arch’s Canadian holdings or Trulite.

“In business, it’s always the survival of the fittest,” Silverstein said, “and this puts us in the position to survive and grow. We have new, deep-pocketed investors who want to grow and I fully expect us to do so in the future.

Representatives of the glass and metal industries had a solemn reaction to the news.

“It is a sad day in our industry when you see a company as large as Arch fall, and I think there are a lot of lessons to be learned from this,” commented Bob Price of J.E. Berkowitz.

On October 30, Arch had issued a statement on the recent closure of facilities in Kansas City, Kan.; Rogers, Minn.; Nashville; and Sarasota, Fla. According to the statement, the company “selectively closed or temporarily shuttered certain locations whose customers can be fully served and supported by other Arch facilities.”

Visit www.usgnn.com for updates to this story. For an inside perspective on the filing, click on Max Perilstein’s blog on www.usgnn.com.


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