Real Industry (f/k/a Signature Group Holdings) and eight affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 17-12464. The holding company, which relies on the operations of its subsidiaries and external financing sources for its liquidity needs, is represented by Mark Minuti of Saul Ewing Arnstein & Lehr.
In conjunction, Real Alloy Holding and its U.S. subsidiaries also filed Chapter 11 petitions; however, Real Alloy’s operations in Germany, United Kingdom, Norway, Canada and Mexico and its Goodyear, AZ joint venture are not included in these filings. Real Alloy has entered into an agreement in principle with its existing asset-based facility lender and certain of its bondholders for continued use of its $110 million asset-based lending facility and up to $85 million of additional liquidity through debtor-in-possession financing that will provide Real Alloy the ability to continue to fund ongoing business operations. This financing is a consensual arrangement executed with Real Alloy’s principal lender and holders of a majority of its bonds, with the ability to provide Real Alloy with immediate incremental liquidity.
The Company explains, “Real Alloy’s operations in the United States have been affected by severely tightened liquidity during the past year, due in part to recently constrained trade credit terms, which hindered Real Alloy’s ability to timely refinance its $305 million 10% senior secured notes due January 2019 (‘Senior Secured Notes’) or to expand borrowing capacity under its asset-based lending facility. An extensive review by the Real Industry Board of Directors, Real Alloy Board, management, and advisors determined it would be in the best interest of all Real Alloy stakeholders to initiate the Chapter 11 proceedings.” A corporate release further notes that Real Industry will initiate a plan of reorganization to preserve the value of its net operating loss tax carryforwards (NOLs).
Real Industry further notes that Terry Hogan will continue as president and has been elected to the Real Alloy board. In addition, Michael Hobey has been named president and interim C.E.O. of Real Industry, and he will continue to serve as C.F.O. Hobey will also serve as C.F.O. at Real Alloy. Kyle Ross will continue to serve as C.I.O. at Real Industry; however, he has resigned from the Real Industry board.
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