Vitro America Motions for Relief Under Chapter
April 7, 2011
In addition to Vitro America's agreement to sell substantially all of its assets to private equity firm Grey Mountain Partners, announced yesterday, the Vitro SAB subsidiary also has filed a motion for relief under chapter 11. The motion was accepted with an order by the U.S. Bankruptcy Court for the Northern District of Texas late yesterday.
The four specific companies included in this motion were Vitro America LLC, of which Binswanger Glass is a part, Super Sky International Inc., Super Sky Products Inc., and VVP Finance Corp.
However, the companies maintain that the involuntary petition for bankruptcy filed against them in November 2010 was unnecessary.
"The Alleged Debtors continue to assert that the Involuntary Petitions filed on November 17, 2010, were neither justified nor meritorious, legally or factually," write the companies. "Nevertheless, for the economic and business reasons expressed in the Affiliate Financing Motion and proven during the sealed hearing on March 24, 2011, Movants respectfully request that the court enter an order for relief under chapter 11 of title 11 of the United States Code "
In addition, the companies also have announced that they will file a motion seeking authorization to obtain $30 million in debtor-in-possession (DIP) secured financing from their pre-petition lender, Bank of America, as well as an additional $7.5 million from Vitro to free up liquidity under the DIP funding.
According to a statement from parent company Vitro SAB, Vitro America and Super Sky intend to use their current cash availability and the DIP funding to fulfill their post-petition ordinary course obligations to employees, customers and trade vendors as they come due during the sale process.
"Vitro America Group has faced important challenges related
to the financial crisis that began during the second half of 2008
which lead to a sharp decline in commercial construction in the
United States," says Hugo Lara, CEO of Vitro. "While
analysts expected a rebound in commercial construction, as of
today, there are no clear signs of a recovery. As a result, Vitro
America had a negative cash flow from operation in 2010. In addition,
the severe negative impact of the involuntary petitions filed
by certain bondholders has accelerated the deterioration of the