Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comIndustrial Laundry Giant, Coyne Textile, Seeks Bankruptcy Protection
Author: Joel R. Glucksman|August 10, 2015
Coyne Textile falls into debt
Industrial Laundry Giant, Coyne Textile, Seeks Bankruptcy Protection
Coyne Textile falls into debt
Last week, Coyne International Enterprises Corp., one of the largest privately-owned industrial laundry companies in the U.S., announced plans to file for Chapter 11 bankruptcy protection. The company, also known as Coyne Textile, is seeking to restructure its balance sheet and complete sales of its three primary operating units.
Coyne Textile blamed financial struggles over the last two years for its decision to file for Chapter 11 bankruptcy protection. In its court filing, the company reported that it lost $1.5 million in 2013 and another $7.1 million in 2014. Coyne Textile also listed between $10 million to $50 million in assets, with approximately $50 million to $100 million in liabilities. The organization then claimed to have an estimated 5,000 creditors, most notably including senior lender NXT Capital and junior secured lender Medley Opportunity Fund II, to which Coyne owed $34 million and $20 million, respectively.
According to the bankruptcy documents, Coyne Textile claimed to have lost more than $6.6 million in revenues after three key customers, General Mills, AK Steel and Mylan NV terminated their contracts. Furthermore, the organization stated that several customers had terminated contracts for uniform laundering and reduced the size of their work forces, thereby lowering Coyne’s laundering volume.
The reorganization plan
Lenders took control over Coyne Textile’s operations in 2014 after the company failed to meet its debt obligations. Following the announcement of the company’s Chapter 11 bankruptcy filing, president and CEO Thomas Coyne was terminated from all positions within the organization. However, Coyne’s management team will continue to oversee all company operations throughout the restructuring period with no expected service interruptions.
The organization has also reached asset sales agreements with Clean Uniforms, More!, Prudential Overall Supply, and NXT Newco as part of the reorganization proposal. Under the planned sale to Clean Uniforms and More!, Coyne will sell its customer routes for $4 million. Then the company will sell its facility in Richmond, VA as well as its equipment and customer routes in Greenville, SC to Prudential Overall Supply for $7 million. The third proposed sale involves the sale of all remaining assets including equipment, customer routes and facilities to NXT Newco for $22.5 million.
Continuing operations
Throughout the reorganization process, Coyne Textile plans to continue operations under the supervision of the U.S. Bankruptcy Court. However, to finance its daily operations through the bankruptcy process, Coyne Textile has reached an agreement with NXT Capital for a commitment of $3.5 million in debtor-in-possession financing.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
Industrial Laundry Giant, Coyne Textile, Seeks Bankruptcy Protection
Author: Joel R. Glucksman
Last week, Coyne International Enterprises Corp., one of the largest privately-owned industrial laundry companies in the U.S., announced plans to file for Chapter 11 bankruptcy protection. The company, also known as Coyne Textile, is seeking to restructure its balance sheet and complete sales of its three primary operating units.
Coyne Textile blamed financial struggles over the last two years for its decision to file for Chapter 11 bankruptcy protection. In its court filing, the company reported that it lost $1.5 million in 2013 and another $7.1 million in 2014. Coyne Textile also listed between $10 million to $50 million in assets, with approximately $50 million to $100 million in liabilities. The organization then claimed to have an estimated 5,000 creditors, most notably including senior lender NXT Capital and junior secured lender Medley Opportunity Fund II, to which Coyne owed $34 million and $20 million, respectively.
According to the bankruptcy documents, Coyne Textile claimed to have lost more than $6.6 million in revenues after three key customers, General Mills, AK Steel and Mylan NV terminated their contracts. Furthermore, the organization stated that several customers had terminated contracts for uniform laundering and reduced the size of their work forces, thereby lowering Coyne’s laundering volume.
The reorganization plan
Lenders took control over Coyne Textile’s operations in 2014 after the company failed to meet its debt obligations. Following the announcement of the company’s Chapter 11 bankruptcy filing, president and CEO Thomas Coyne was terminated from all positions within the organization. However, Coyne’s management team will continue to oversee all company operations throughout the restructuring period with no expected service interruptions.
The organization has also reached asset sales agreements with Clean Uniforms, More!, Prudential Overall Supply, and NXT Newco as part of the reorganization proposal. Under the planned sale to Clean Uniforms and More!, Coyne will sell its customer routes for $4 million. Then the company will sell its facility in Richmond, VA as well as its equipment and customer routes in Greenville, SC to Prudential Overall Supply for $7 million. The third proposed sale involves the sale of all remaining assets including equipment, customer routes and facilities to NXT Newco for $22.5 million.
Continuing operations
Throughout the reorganization process, Coyne Textile plans to continue operations under the supervision of the U.S. Bankruptcy Court. However, to finance its daily operations through the bankruptcy process, Coyne Textile has reached an agreement with NXT Capital for a commitment of $3.5 million in debtor-in-possession financing.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
