Atrium Companies File for Voluntary Chapter
January 21, 2010
Dallas-based Atrium Companies Inc., which owns Atrium Windows and
Doors, filed for Chapter 11 yesterday in the U.S. Bankruptcy Court
for the District of Delaware. Likewise, its Canadian subsidiary
initiated reorganization proceedings under the Companies' Creditors
Arrangement Act (CCAA) in the Ontario Superior Court of Justice
Though Atrium and its subsidiaries have filed for bankruptcy, company
officials announced yesterday that the filing is part of an agreement
they reached with more than two-thirds of their senior secured lenders
to reduce its outstanding debt by more than $350 million, or more
than 50 percent of its existing debt, through a "pre-negotiated"
restructuring of its balance sheet.
The following Atrium subsidiaries and divisions are included in
the Chapter 11 filing:
Atrium Corp.; ACIH Inc.; Aluminum Screen Manufacturers; Atrium Door
and Window Co. - West Coast; Atrium Door and Window Co. of Arizona;
Atrium Door and Window Co. of the Northeast; Atrium Door and Window
Co. of the Northwest; Atrium Door and Window Co. of the Rockies;
Atrium Enterprises; Atrium Extrusion Systems Inc.; Atrium Florida
Inc.; Atrium Vinyl Inc.; Atrium Windows and Doors of Ontario Inc.;
Champion Window Inc.; North Star Manufacturing (London) Ltd.; R.G.
Darby Co. Inc.; Superior Engineered Products Corp.; Thermal Industries
Inc.; and Total Trim Inc.
The company lists between 5,001 and 10,000 creditors; estimated
assets between $100,000,001 and $5 million; and estimated liabilities
between $500,000,001 and $1 billion in its official Chapter 11 filing.
A number of the company's creditors holding the 50 largest unsecure
claims are suppliers within the glass and glazing industry. Some
of those listed include:
Cardinal Glass ($814,810); Mikron ($492,612); Amesbury Group ($237,119);
PPG ($235,347); Royal Window and Door Profiles ($224,675); Truth
Hardware ($139,441); and H.B. Fuller ($82,723).
According to the company statement, Atrium intends to move forward
with the restructuring on an expeditious basis and complete the
restructuring process in approximately three to four months. Atrium
filed with the court its proposed plan of reorganization and related
disclosure statement; the company's senior secured lenders include,
among others, a $125 million new equity investment from Atrium's
current majority equity owner, Kenner & Company Inc., and its
co-investor, Golden Gate Capital.
Atrium says it has secured a commitment for Debtor-in-Possession
(DIP) financing of $40 million from its pre-petition secured lenders,
which in addition to cash on-hand and ongoing cash flow from operations,
will provide ample liquidity to meet normal operating costs during
the restructuring process.
Atrium and each of its subsidiaries intend to operate as usual during
the debt restructuring process, and existing management will remain
in place. The company does not anticipate any layoffs or facility
closings as a result of the debt restructuring, and plans to continue
to pay all employee wages and benefits in the normal and ordinary
course. Suppliers will be paid under normal terms for goods and
services provided after the filing date of January 20, 2010. In
addition, and subject to its approval, company officials say its
plan provides for the payment in full in cash of all valid claims
for goods and services provided to the company before the filing,
during which time the company has remained current on all of its
trade-related payment obligations.
"The balance sheet restructuring announced today will substantially
reduce our outstanding debt and put Atrium in a much stronger financial
position to grow our business over the long term," says Gregory
T. Faherty, president and chief executive officer of Atrium. "We
have already done the hard work of lowering our cost structure and
reducing excess capacity in light of the difficult environment under
which we have been operating for more than three years. And, we
are already experiencing the positive impact of these initiatives
through increased profitability. Now, as part of the restructuring
announced today, we will put in place a healthier capital structure
that is more appropriate to the current size of the market, while
freeing up additional cash that can be invested in future growth
as the housing market rebounds. Once our balance sheet is right-sized,
Atrium will be more competitive than ever."
He continues, "Importantly, we already have the support of
an overwhelming number of our senior secured lenders, so we expect
to be able to move through the court process relatively quickly
and efficiently. Additionally, the support of Kenner & Company
and Golden Gate, and their investment, is evidence of Atrium's bright
Atrium's legal advisors are Kirkland & Ellis in the United States
and Goodmans LLP in Canada. Moelis & Company is serving as financial
HERE for additional information on Atrium's balance sheet restructuring.
HERE to read the full petition.
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