Keystone Files for Chapter 11 Protection

Company's union workers recently postponed a vote to authorize a strike against the company. Union says decision was done to give company more of a chance to secure financing.

Published February 27, 2004

Keystone Consolidated Industries, Inc. has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

 

The company also announced it is seeking immediate bankruptcy court approval of $60 million in debtor-in-possession (credit facilities consisting of a $55.0 million secured DIP financing from Congress Financial Corp., and a $5 million secured DIP financing from EWP Financial LLC, a wholly-owned subsidiary of Contran Corp., Keystone's majority shareholder. EWP Financial LLC is also participating in the $55 million Congress facility.

 

The company had hoped to restructure outside of bankruptcy court, and during the past two years took a number of steps towards that end including restructure of $93.9 million of secured debt, disposition of non-core facilities, eliminating certain operations and substantial reductions in salaried personnel. However, Keystone's limited liquidity combined with rapidly escalating costs and other industry conditions resulted in the company being forced to seek the protection of the bankruptcy court in order to complete the restructure of the company and preserve the future of Keystone.

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