Atchison Casting Corp. seeks to liquidate
Washington ? Atchison Casting Corp. is asking the bankruptcy court overseeing its Chapter 11 case to convert the proceedings to a Chapter 7 liquidation, according to court papers obtained Friday by Dow Jones Newswires.
In a request filed Tuesday with the U.S. Bankruptcy Court in Kansas City, Kan., the company said it has been unable to negotiate an extension of its debtor-in-possession loan or to use its lenders’ cash collateral. The loan, which expired Wednesday, was used to finance the Chapter 11 reorganization case, court papers said.
A hearing on the conversion request has been scheduled for Jan. 12 in Kansas City.
In a press release on Nov. 19, Atchison Casting said it had reached a deal with KPS Special Situations Fund II L.P. to buy the company’s remaining assets. Under the agreement, KPS Special Situations formed a company to purchase five business units of Atchison for a total price tag of $40 million.
Court papers said the decision to liquidate the remaining assets under the Chapter 7 provision of the Bankruptcy Code is in the best interests of creditors and the estate because the company no longer has operating assets.
The company, which is based in Atchison, Kan., added that remaining in Chapter 11 would cause the estate to incur additional costs and expenses because of the additional administrative duties required under Chapter 11, such as the preparation of monthly operating reports.
Atchison Casting also asked that the hearing date on the conversion issued be moved up to Jan. 12, because its banking group refused to extend the company’s $7.5 million DIP loan.
The company, which makes castings for the automotive, construction, railroad, mining and utilities industries, filed for Chapter 11 bankruptcy protection Aug. 4, listing assets of $136.8 million and debts of $96.8 million.