Mid America Brick & Structural Products, L.L.C. (MAB) filed a voluntary petition for Chapter 11 business reorganization Friday with the U.S. Bankruptcy Court for the Eastern District of Missouri.
According to a press release from the company, as part of the reorganization, MAB has obtained financial backing from a consortium led by an affiliate of Advantage Capital Partners to bolster its liquidity and enable it to focus on the continued growth of its core product lines of architectural and residential brick.
The press release states this fully-committed debtor-in-possession credit facility will allow the company to operate its business during the Chapter 11 process and to continue the flow of products and services to its customers. MAB intends to honor all post-petition obligations to its suppliers in the ordinary course of business.
During this time period, MAB will be seeking a strategic partner as part of an asset purchase transaction or a recapitalization of the company.
"We have every confidence that Mid America Brick will emerge from this process a much stronger company," said Frank Cordie, the company's Chief Executive Officer since its inception. "As the housing market continues to rebound and market conditions improve, MAB will be poised to become a leading provider of brick in the U.S. Central Region."
Founded in 2010, MAB refurbished the former A.P. Green brick factory and began producing brick in the summer of 2011. In 2012, MAB's first full year of business, the company made appreciable market share gains within its competitive region. However, due to the continued depression of the U.S. housing market and over-capacity in the brick industry, the company could not meet its sales and profitability projections.
"After considering the advantages of Chapter 11 at this time, the Board of Directors believes that this is a necessary step, and the right thing to do for the future of Mid America Brick," said Cordie. "We have made significant strides in developing product lines that serve both the architectural and residential construction industries. Filing Chapter 11 allows us to continue servicing those customers with top quality products as we enter the 2013 building season."
As is common in the industry, MAB's production facility has been dormant in December and January. The press release states the company is currently in the process of resuming production and will return to full employment levels by the end of February.
In its Chapter 11 petition Mid Ameria lists between $10 million and $50 million in estimated liabilities and between $1 million and $10 million in estimated assets.
According to a story published on The St. Louis Post-Dispatch website www.stltoday.com, creditors holding unsecured claims include Community South Bank in Knoxville, Tenn., which has a $3 million claim and the Missouri Department of Economic Development, which has a lien on the property tied to a $1 million claim. The city of Mexico also has a $1.5 million claim, which is partially secured, according to court filings.
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