Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
GSE Environmental files for bankruptcy after posting losses
Author: Joel R. Glucksman
Date: May 16, 2014
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GSE Environmental Inc. and its affiliates filed for protection under Chapter 11 of the bankruptcy law May 4, according to Reuters. GSE makes spill containment products, including geosynthetic lining, for the waste management, water and mining sectors. In a court filing, the company listed assets of between $100 million and $500 million, and liabilities within the same range.
GSE has received approximately $45 million in debtor-in-possession financing, the news source reported. It plans to use this funding to repay debt and for general corporate purposes. The Houston-based company was delisted from the New York Stock Exchange two months ago after it failed to maintain listing requirements. The most recent results published for GSE came from its third quarter posting in 2013, which reported a $35.8 million loss, or $1.77 per share. One year earlier, the company reported a $5.2 million profit, or 26 cents per share.
In total, GSE Environmental’s profits declined from $46 million in 2012 to $16 million in 2013, according to The Wall Street Journal. The company cited heightened competition and the lingering effects of the European recession for its financial position. The filing only effects GSE’s North American operations, which it plans to hand off to European lenders. GSE Environmental’s other international affiliates and debt won’t be affected, nor will a $40 million manufacturing facility built last year in Suzhou, China.
Under the restructuring that GSE is proposing, trade suppliers would share $1 million, the Journal explained. Ownership of the company would pass to senior lenders Littlejohn Opportunities Master Fund LP, Tennenbaum Opportunities Partners V, LP and Strategic Value Partners, LLC. GSE is based in Houston, Texas, but also maintains plants in Chile, Germany, Thailand, China and Egypt. A controlling share in the company is owned by CHS Capital LLC and its affiliates, the rest by former directors, officers and investors.
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