Hugo Neu Corp. offers to provide resources to fund company's reorganization.
Electronics recycling firm WeRecycle! Inc., based in Meriden, Conn., has announced that it has filed a petition to restructure under Chapter 11 of the U.S. Bankruptcy Code. The company also says it has received a proposal for investment from Hugo Neu Corp., New York City.
Hugo Neu is a privately owned firm that manages, builds and invests in recycling, real estate, water transportation and cleantech businesses.
Subject to bankruptcy court approval, Hugo Neu’s plan would provide interim resources, if necessary, to help finance WeRecycle!’s reorganization. Under the terms of the proposal, Hugo Neu would acquire a controlling interest in WeRecycle! and would make further investments in technology and downstream recycling processes to ensure the company remains a leader in environmentally responsible recycling of electronics.
“We have grown tremendously over the past several years, but the unprecedented downturn in the economy and the subsequent credit crunch created liquidity problems and made it impossible for us to raise the capital needed to fund our continuing expansion,” says Mick Schum, P.E., president of WeRecycle!.
Gina Chiarella, WeRecycle! chief operating officer, says the company grew 30 percent in 2008, adding a new plant in Mount Vernon, N.Y. However, WeRecycle! had difficulty obtaining loans in light of the credit crunch. “The downturn in the economy made it difficult to keep up with our growth,” she says. “We were operating under strain for a while and just keeping ahead of it. Chapter 11 was unavoidable.”
Chiarella says she does not anticipate having to let employees go when the company’s bankruptcy petition is approved. She also says she anticipates the company’s restructuring will take six months.
“We believe the planned investment by Hugo Neu Corp. will allow us to fulfill our vision of bringing the highest quality electronics recycling processes to the public and private sector,” Schum says.
Chiarella adds that Hugo Neu, which brings 60 years of recycling industry knowledge to the partnership, offers experience in operations as well as processes and technologies that can aid WeRecycle! a well as transform the electronics recycling industry in general.
Hugo Neu and WeRecycle! began talking about a partnership in the fourth quarter of 2008, Chiarella says, after Hugo Neu heard about the company through a number of NGOs, who offered WeRecycle! as an example of a reputable electronics recycling operation.
Hugo Neu Chairman John L. Neu says, “We were looking for cutting-edge electronics recycling companies in which to invest and reached out to WeRecycle! because we believe they are the best.”
He adds, “No company is immune to the current economic crisis, but I believe WeRecycle! is going to emerge a better and stronger business that will benefit customers, employees and their recycling partners.”