New Chapter 11 Filing - Duro Dyne National Corp.
9/7/18
Duro Dyne National Corp., a manufacturer of sheet metal accessories and equipment for the heating, ventilating and air conditioning industry has filed for bankruptcy in the District of New Jersey. It constitutes one of those rare instances where an otherwise healthy business requires bankruptcy protection to ward off potential liability.
The company reported steadily increasing sales and profits as steel prices fell to historic lows and construction activity continued to rebound from the recession. In 2017, the company had $69mm in sales and $5.2mm in EBITDA. In 2018, steel prices have increased -- in part due to tariffs -- and so the Company also raised prices. It expects $73.6mm of sales and $5.2mm of EBITDA. So what's the issue here?
Per the company:
Beginning in the mid to late 1980s, the Company was sued on account of Asbestos Personal Injury Claims in various jurisdictions alleging liability for bodily injury allegedly sustained as a result of exposure to products containing asbestos allegedly manufactured and/or distributed by the Company from the 1950s through the 1970s.
Consequently, due to the increasing costs of defending and resolving the asbestos personal injury claims and the decline of insurance proceeds covering them, the company filed for bankruptcy to establish a plan that institutes a "channeling" injunction that directs all present and future asbestos-related demands to a funded trust for handling and payment.
- Jurisdiction: D. of New Jersey (Judge Kaplan)
- Capital Structure: $1.29mm funded secured debt
- Company Professionals:
- Legal: Lowenstein Sandler LLP (Kenneth Rosen, Jeffrey Prol)
- Financial Advisor: Getzler Henrich & Associates LLC
- Claims Agent: BMC Group Inc. (*click on company name above for free docket access)
- Other Parties in Interest:
- Exit Lender: Bank of America NA
- Ad Hoc Asbestos Claimants Committee
- Legal: Caplin & Drysdale Chartered (James Wehner, Jeffrey Liesemer)
- Prepetition Future Claimants Representative
- Legal: Young Conaway Stargatt & Taylor LLP (Edwin Harron, Sara Beth Kohut)