ABC-NACO Inc. Oct. 18 filed for Chapter 11 reorganization under U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Northern District of Illinois, citing a severe downturn in the railroad supply industry, a large debt burden, and a summertime 80-day strike at its Sahagun, Hidalgo, Mexico, facility and roof collapse at its Cicero, Ill., factory.
ABC-NACO plans to continue operating its worldwide facilities to fulfill customer orders; the Chapter 11 filing doesn't include the company's subsidiaries or joint ventures in Canada, Mexico, Scotland, Sweden, Portugal or China.
To continue operations, ABC-NACO recently received a $20 million debtor-in-possession financing commitment from the company's senior-secured bank group.
"Despite our efforts to reduce costs and maximize cash flow, the continuing deterioration of the rail supply market significantly aggravated our liquidity situation," said Vaughn Makary, ABC-NACO president and chief executive officer, in a prepared statement.
The company retained management consulting firm Morris-Anderson and Associates Ltd. and investment banker Lincoln Partners LLC to help evaluate ABC-NACO's reorganization alternatives, and law firm D'Ancona & Pflaum LLC to assist with court proceedings.
Source: Progressive Railroading Daily News
