 
Trainor Glass Motions to Use Cash Collateral,
in Light of Chapter 11 Filing
March 13, 2012
by Sahely Mukerji, smukerji@glass.com
Trainor Glass Co. has filed a motion
to use cash collateral, incur post-petition debt, and grant adequate
protection and provide security and other relief to First Midwest
Bank. The motion followed the company's voluntary
petition for Chapter 11, filed late Friday in the U.S. Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
"[Trainor] and First Midwest have agreed upon an initial budget
for nine weeks," reads the motion. "... First Midwest has agreed
to allow the debtor to use cash collateral and, to the extent needed,
the [debtor-in-possession] financing to pay the expenses enumerated
on the initial budget, and as amended, modified or supplemented
from time to time, as may be agreed to by First Midwest subject
to a variance of 10 percent per line item and a cumulative variance
of 10 percent.
"First Midwest has also agreed to allow the debtor to use a portion
of its cash collateral to pay for the pre-petition wages due debtor's
former non-insider employees and related payroll obligations in
an amount not to exceed $494,000," the court document states.
Trainor's liquidation budget , for the period
of March through May, filed as an exhibit (excerpted here)
with the motion, shows approximately $1.5 million in total cash
receipts; $1.3 million total in operational disbursements; $221,275
in total administrative disbursements; and a net cash flow of $10,812.
The company's nine-week accounts receivable analysis shows a total
amount of approximately $1.3 million. Its nine-week staffing for
liquidation amounts to $104,019.
The filing also provides insight into the company's demise, and
attributes it ultimately to the recession that started in 2008.
"By 2010, Trainor found itself with significantly reduced liquidity
and financial losses which caused Trainor to close many of its plants,
sell equipment, and reduce workforce," reads the motion. "During
the period June 2011 - December 31, 2011, Trainor closed 13 facilities,
resulting in significant additional losses. On February 21, 2012,
after being unable to secure additional financing necessary to continue
operating, Trainor ceased business operations and terminated all
employees. At that time, Trainor operated nine facilities and had
approximately 508 employees (148 union and 360 non-union) in 14
states."
Stay tuned to USGNN.com for the latest on this story as it
becomes available.
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