Vitro America Motions for Relief Under Chapter
April 7, 2011
In addition to Vitro America's agreement to sell substantially
all of its assets to
private equity firm Grey Mountain Partners, announced yesterday,
the Vitro SAB subsidiary also has filed a motion
for relief under chapter 11. The motion was accepted with an
by the U.S. Bankruptcy Court for the Northern District of Texas
The four specific companies included in this motion were Vitro
America LLC, of which Binswanger Glass is a part, Super Sky International
Inc., Super Sky Products Inc., and VVP Finance Corp.
However, the companies maintain that the involuntary
petition for bankruptcy filed against them in November 2010
"The Alleged Debtors continue to assert that the Involuntary
Petitions filed on November 17, 2010, were neither justified nor
meritorious, legally or factually," write the companies. "Nevertheless,
for the economic and business reasons expressed in the Affiliate
Financing Motion and proven during the sealed hearing on March 24,
2011, Movants respectfully request that the court enter an order
for relief under chapter 11 of title 11 of the United States Code
In addition, the companies also have announced that they will file
a motion seeking authorization to obtain $30 million in debtor-in-possession
(DIP) secured financing from their pre-petition lender, Bank of
America, as well as an additional $7.5 million from Vitro to free
up liquidity under the DIP funding.
According to a statement
from parent company Vitro SAB, Vitro America and Super Sky intend
to use their current cash availability and the DIP funding to fulfill
their post-petition ordinary course obligations to employees, customers
and trade vendors as they come due during the sale process.
"Vitro America Group has faced important challenges related
to the financial crisis that began during the second half of 2008
which lead to a sharp decline in commercial construction in the
United States," says Hugo Lara, CEO of Vitro. "While analysts
expected a rebound in commercial construction, as of today, there
are no clear signs of a recovery. As a result, Vitro America had
a negative cash flow from operation in 2010. In addition, the severe
negative impact of the involuntary petitions filed by certain bondholders
has accelerated the deterioration of the business."
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