A Sad Prediction Comes True
On Jan. 6 I posted predictions for 2009, including the following:
At least one significant downtown employer will end up filing for bankruptcy.
Sadly, this one has come true.
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Comments
This bankruptcy could ultimately end up being a good thing for the company. It is a good sign that they have been able to secure DIP financing during the pendency of the Ch. 11. It is certainly good that it isn’t a Ch. 7 liquidation (probably unlikley in any event, given the size of this company). I would be very concerned if they were still seeking DIP financing as that could very well lead to a liquidation of the company by the bk trustee. The details of the bk plan were not shown in the article, but it unfortunately will likely result in some downsizing. However, it does not sound like the current plan calls for liquidation of the company and the elimination of all 200+ jobs. The company may very well emerge from this bankruptcy a stronger entity as it is unlikely it will be snapped up by another company in this current national economic climate. Although not the ideal way to exit the shadow of Kerr-McGee, this may be what the company needs to move forward. Let’s see what the bankruptcy reorganization plan says. They still have net positive assets to liabilities, but it depends the company’s current balance sheet status (minus the liabilites to be elimiated in bk) to determine if this company will survive. I suppose time will tell. Hopefully we can get the reorganization details soon.
Steve, this has been obvious for quite some time. When you said significant downtown employer, I was thinking on a larger scale, like in the 500-600 employee range – though losing any downtown jobs is a serious matter. I’m glad its chapter 11 and not 13, perhaps they can yet get things together.