WEDNESDAY, JANUARY 4, 2023
In an effort to better facilitate the sale of its businesses, color pigments company DCL Corporation announced last month that its United States-based subsidiaries filed voluntary petitions for a court-supervised reorganization under Chapter 11 of the Bankruptcy Code (Chapter 11) in the U.S. Bankruptcy Court for the District of Delaware.
The individual petitions for relief were officially filed by DCL Holdings, Inc., and five affiliated debtors on Dec. 20, 2022. The cases are pending before the Honorable J. Kate Stickles and are jointly administered under Case No. 22-11319. Assets and liabilities both report totals between $100 million and $500 million.
According to reports, DCL and its Canadian subsidiaries have also commenced court-supervised restructuring proceedings in Canada under the Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (CCAA).
DCL's international subsidiaries in the United Kingdom and the Netherlands, however, have not been included in the Chapter 11 or CCAA proceedings.
Restructuring Cases
Described as a restructuring process, DCL has recently appointed Scott Davido of Ankura Consulting Group (Ankura) as the company’s Chief Restructuring Officer to assist with the sale of the business. Through this agreement, Ankura Consulting Group has also been named as DCL’s financial advisor.
In the court proceedings, DCL is being represented by King & Spalding LLP and Blake, Cassels & Graydon LLP as legal counsel, while TM Capital Corp is serving as the company’s investment banker.
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In an effort to better facilitate the sale of its businesses, color pigments company DCL Corporation announced last month that its United States-based subsidiaries filed voluntary petitions for a court-supervised reorganization under Chapter 11 of the Bankruptcy Code (Chapter 11) in the U.S. Bankruptcy Court for the District of Delaware. |
“We are pleased to enter into this asset purchase agreement, and to have the continued support of our lenders as we complete this process,” said Davido.
“The U.S. and Canadian restructuring proceedings will facilitate our sale process, address our liquidity challenges, strengthen our balance sheet and better position DCL for the future. Additionally, we thank all of the DCL employees for their continued dedication and tireless efforts, during these challenging times.”
During this process, DCL existing lender, Wells Fargo, has agreed to provide up to $55 million in debtor-in-possession financing in support of the restructuring process. Once DCL is given court approval, the company expects that the financing from Well Fargo, in addition to cash flow from operations, will better support the business in normal operations throughout the remainder of the process.
As the court proceedings are ongoing, DCL intends to continue to serve its customers and end users in North America, and globally. In filing customary first-day motions, upon receiving approval, DCL will be better equipped to operate its business in the normal course under Chapter 11 and CCAA, including, among other things, granting authority to pay employee wages and benefits and honor customer commitments in the ordinary course of business.
DCL is also planning to pay all vendors in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.
A hearing on the Debtors' First Day Motions was held on Dec. 22, 2022, before Stickles, in the United States Bankruptcy Court for the District of Delaware. A Final Hearing on Certain of the First Day Motions is scheduled to be held on Jan. 19.
The Meeting of Creditors/Notice of Commencement is slated to take place the following week, on Jan. 23.
To view court motions and orders, click here.
Tagged categories: Bankruptcy; Business conditions; Business management; Business matters; Business operations; DCL Corporation; Good Technical Practice; Pigments; Program/Project Management
