American Architectural Inc. Motions for Authorization of Sale of Company's Assets Via Auction
September 7, 2012

by Penny Stacey, pstacey@glass.com

American Architectural Inc. (AAI) has requested permission from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to sell its assets, including several outstanding subcontracts, via an auction process. The motion was filed as part of the company's ongoing Chapter 11 bankruptcy case, filed in June.

According to the motion, the company had a backlog of approximately 13 subcontracts, with revenues in excess of $29 million, at the time of the bankruptcy filing. Seven of the projects have been completed, leaving six "that have work to be performed and will be available for sale at the auction." Among these is a $7.1 million project at Carnegie 57 in New York; a $3.9 million project at One World Trade Center; a $15.4 million on the Cablenet at One World Trade Center; a $6.2 million project at the World Trade Center Path Hall; a $3.8 million project at World Trade Center Tower 4; and a $685,000 project on the World Trade Center Path Hall Elevator.

The company previously had been in negotiations with general contractor Skanska USA about the Path Hall project.

"[AAI] has analyzed the cost of completing the subcontracts, the lack of adequate financing for the completion of all of these projects, the inability of [Diamond Indemnity Trust] to provide financial assistance under the surety bonds, and the overall existing debt, and have determined that a prompt sale of the assets as a 'going concern' is in the best interest of the debtors and their estates," writes AAI in the motion.

Company officials say the only items not up for sale are its cash, pre-petition litigation claims, and claims under Chapter 5 of the bankruptcy code

"The debtors also believe that offering the assets for sale at the auction will greatly enhance their ability to reorganize the affairs," continues the motion.

If the auction is approved and held, AAI officials say they intend to file a plan (upon the closing of an asset sale) for distribution of the proceeds from the sale.

At press time, the court had not yet ruled on the motion.

This story is an original story by USGlass magazine/USGNN™. Subscribe to USGlass magazine.
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