Door Manufacturer Atrium Files for Chapter 11 Protection in Delaware Court
Company hopes to reduce its debt by over $350 million with prepackaged plan
January 25, 2010
Window and patio door manufacturer Atrium Cos. Inc. filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on Wednesday. The company's Chapter 11 filing is part of a prepackaged reorganization plan approved by more than two-thirds of its senior secured lenders.
Dallas-based Atrium claims to be one of the largest manufacturers of patio doors and residential vinyl and aluminum windows in North America. Its Canadian subsidiary filed for bankruptcy in the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act.
Atrium hopes its restructuring plan will reduce its outstanding debt by more than 50%, or $350 million. Atrium's majority owner, Kenner & Co., and Kenner's co-investor, Golden Gate Capital, will invest $125 million in exchange for equity in the reorganized company.
Atrium has secured a $40 million debtor-in-possession loan from its prepetition secured lenders. GE Business Financial Services is acting as administrative and collateral agent for the DIP financing.
The company's largest unsecured creditors include U.S. Bank National Association, Cardinal Glass, Mikron Industries and Aurora Plastics Inc.
The company's management team will remain in place, and no layoffs or facility closings are expected to occur, according to a company press release.
Judge Brendan Shannon of the Delaware bankruptcy court approved all of Atrium's "first day motions," allowing the company to pay all employee wages and benefits, honor all customer commitments and warranties and utilize its existing cash management systems without disruption during the restructuring process. The Ontario Superior Court of Justice granted similar authorizations.
Moody's Investors Service downgraded Atrium's probability-of-default rating to D from Ca/LD following the company's announcement about its bankruptcy filings. In a report published Thursday, Moody's stated it would withdraw all of Atrium's ratings.
Moelis & Co. has been retained as Atrium's financial advisor, while Kirkland & Ellis and Goodmans are serving as its legal advisors in the U.S. and Canada, respectively. The U.S. case is filed under No. 10-10150.
Atrium's products are sold under the Atrium Windows and Doors, HR Windows, Danvid Door and Window, Thermal Industries, Superior Windows, Champion Window, Darby Door and North Star Windows and Doors brands.
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