Point Blank Solutions, Inc., a leader in the field of protective body armour, today announced that the company and its subsidiaries have filed a voluntary petition for Chapter 11 reorganization
. The company also announced that it has reached an agreement for up to $20 million of Debtor-in-Possession (DIP) financing, pending bankruptcy court approval.
The decision to file for Chapter 11 protection was driven primarily by continued expenses associated with legacy issues from former management, and the lack of financing available to the company given the state of the credit markets. The company had been seeking financing alternatives that would allow it to continue operating outside of bankruptcy, however, the Board of Directors determined that a Chapter 11 reorganization, was in the best interests of the company, its customers, creditors, employees, and other interested parties.
The company fully intends to continue all business operations throughout the administration of the bankruptcy cases and to honor all of its existing customer commitments without interruption, post-petition. Subject to bankruptcy court approval, the company will use the DIP financing, along with cash from operations, to fulfill these intentions and to meet its working capital needs during the reorganization process.
James Henderson, CEO and Chairman of the Board, stated, "Despite all of the legacy issues we have faced over the past several years, we continue to produce what I believe, are the industry's best products for the most important customers in the world. We have won several key contracts, paid down a substantial amount of our debt and realigned our business to return to profitability. Without a financing facility and with mounting legacy expenses, however, we had to take this step to reorganize. I am confident that we will continue to operate in an efficient manner and meet our customer requirements during the reorganization process and that we will emerge a stronger organization, due to the quality of our products and our people."
Point Blank has filed a series of first-day motions in the bankruptcy court in Delaware, seeking to ensure that it will not have any interruption in maintaining and honoring its commitments during the reorganization process. Although Chapter 11 law prohibits payments for any invoices that were outstanding at the time of the filing without prior court approval, it does provide greater protection to those providers of goods and services who conduct business with the company from this point forward. Approval of the restructuring and all principal steps related thereto, will be subject to numerous preconditions, including, but not limited to, preparation of definitive documentation and approval by the Delaware bankruptcy court.
The company's general bankruptcy counsel is Pachulski Stang Ziehl & Jones LLP and its financial advisor is CRG Partners Group, LLC.
(Point Blank Solutions, Inc.)
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