Glass Iowa Files for Chapter 11; Says No Interruptions will Take
Medieval Glass Iowa has filed for reorganization under Chapter
11 in the U.S. Bankruptcy Court for the Northern District of Iowa.
The documents were filed on Monday, February 23.
Medieval general manager Bill Oates, however, stresses that the
business will continue without interruption.
"The Chapter 11 Bankruptcy Code provides Medieval Glass Iowa
the latitude to continue daily operations providing jobs, with no
interruption in sales or production," he says. "This action
will enable Medieval Iowa to begin to reorganize the Iowa operation
and to build off of the 12 years on durable growth this facility
has provided. The management team in Estherville, Iowa, the employees,
our client base and vendor supply group has been and will continue
to be the heart and soul of what is Medieval Glass Iowa."
Oates attributes the company's troubles to the housing industry,
coupled with the difficulty in the banking industry. He says that
Medieval Glass has been a borrower and partner with a large national
bank for over 12 years. In October 2008, Medieval Glass and the
bank entered into a forbearance agreement through December 31, 2008.
"The changes within the original banking relationship agreement
began to have new and aggressive negative effects on cash flow,"
said Oates. "Consequently, the bank ceased any and further
advances to Medieval Glass on our line of credit starting January
1, 2009. This situation along with new actions has made it extremely
difficult to operate. The ownership group has invested the required
amounts of funding to enable Medieval Glass Iowa to continue to
operate in the hopes that our team and the bank could come to some
new banking partnership."
However, on Friday, February 20, 2009, Medieval Glass Iowa learned
that the bank had initiated a lawsuit for injunction and for replenance
of Medieval Glass's assets pledged to secure the bank's loan.
"Medieval Glass Iowa determined that it was in its customers',
employees' and creditors' best interest to seek to reorganize under
Chapter 11 of the Bankruptcy Code," says Oates.
According to the bankruptcy documents, the company has between
$1-10 million in debt. A few of the creditors listed include Guardian
Industries, Q'So Inc. and Truseal Technologies.
HERE for full text of Medieval's petition for reorganization.
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