Atrium Companies File for Voluntary Chapter 11
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 in Toronto.

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 future."

Atrium's legal advisors are Kirkland & Ellis in the United States and Goodmans LLP in Canada. Moelis & Company is serving as financial advisor.

CLICK HERE for additional information on Atrium's balance sheet restructuring.

CLICK HERE to read the full petition.

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