Reichhold has announced its filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. This action was taken to facilitate a restructuring of the debts of Reichhold, Inc. which represents only the U.S. portion of the global Reichhold organisation.
The Company announced that it has arranged $130 million dollars in financing from its bondholders to fund continuing operations, of which $100 million (subject to court approval) will be available to Reichhold in the form of debtor-in-possession (DIP) financing. The financing will also be used in part to repay the Company’s and its affiliates’ existing secured financing in North America and Europe. The bondholders will also serve as the stalking horse bidder for the U.S. business in a 363 sale process to be conducted over the next few months.
Reichhold affiliates located outside the United States are not included in the filings. These entities will continue to function outside of the Chapter 11 process and they have the necessary liquidity to continue their operations in the ordinary course of business.
John S. Gaither, Chairman, President and CEO of Reichhold Industries said;
For over 85 years, Reichhold has provided value to our global customers. All of Reichhold’s operations are open and serving customers as usual. We have the full support of our bondholders and will emerge from this process even more capable of developing and delivering the innovative products and services that our customers value.
The company has filed a number of customary motions seeking court authorisation to continue to support its business operations during the bankruptcy process, including the payment of employee salaries and health benefits without interruption. The goal is to continue its relationships with customers and suppliers in the ordinary course of business.