Alamo Iron Works Inc, San Antonio, TX, has filed for Ch. 11 bankruptcy protection, according to an announcement on its website. The company said: "This decision was not made lightly but is, we believe, in the best interest of all parties involved with the company."
Alamo Iron Works will use Ch. 11 bankruptcy protection to allow for a sale of the company's assets to Industrial Distribution Group, Charlotte, NC. IDG is owned by Texas-based investment group Luther King Capital Management. The sale is subject to bankruptcy court approval, and if approved, will conclude in late May or early June 2010.
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Alamo Iron Works sells industrial supplies, including paints, lubricants and material handling and welding equipment, cutting tools, PVF and safety products. Most of the distributor's revenues come from industrial supply sales. It also has a steel service center operation.
On its website, Alamo said: "For most of you, the filing will hardly be noticed at all. You may be wondering whether we have enough cash to see us through the sale process. The answer is, 'Yes.' The company has received a commitment for post-petition financing. We expect this post-petition financing to be sufficient to provide adequate funding for all trade and employee obligations incurred after the filing, as well as the company’s ongoing operating needs during the sales process. Equally important, this financing will provide vendors with the added assurance that they will be paid for goods and services we purchase from them after the date of filing (April 5, 2010)."
According to an article on mysanantonio.com, the final blow for the company after a rough year due to the recession was when FaulknerUSA, which was picked by San Antonio to build its convention center hotel, failed to pay Alamo about $1 million for work. Faulkner disputes this claim in the article, saying that the firm actually overpaid Alamo. The two firms are in court to settle this dispute.
The same article said that Luther King Capital Management may pay more than $8 million for certain assets of the company. Luther King plans to expand the firm if the sale goes forward.
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