Nukote International and four of its subsidiaries have filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Nashville.
Nukote disclosed that it owes $14.5 million to its top 20 unsecured creditors. It stated that its assets are worth about $86 million, while its liabilities stand at approximately $79 million. Four subsidiaries filed accompanying Chapter 11 petitions.
The filings say Nukote owes lender CIT Group about $30 million on a secured financing package. The company is said to owe $2.6 million to its largest unsecured creditor, Grupo American Industries S.A. de C.V., of Chihuahua, Mexico. Other major creditors are located in Canada, Hong Kong, Vietnam and across the U.S.
Nukote says it is operating business as usual and says it has taken this step in order to be able fill customer orders.
The company stated “Because of today’s economic conditions, although we have made every one of our bank interest and principal payments fully and on time, our bank made it hard for us to satisfy their ever increasing demands while still spending money to make enough products for our customers. We have decided that serving our customers must come first. We have requested court protection under Chapter 11 so that we can use all of our resources to clear back orders and to manufacture the products our customers need, rather than focusing on banks.”
“As a result of this step, we now will be able to fill back orders and new orders much more quickly.” Nukote added “To further improve our capacity, we also have arranged for an additional source of products to supplement what we make in our Mexico factory.”
Nukote is one of the world’s largest remanufacturers of inkjet and laser toner printer cartridges.
Nukote has its headquarters and R&D labs in Rochester, NY. Its main production centre is in Monterrey, Mexico and it manufactures toner in Connellsville, Pennsylvania. Nukote’s distribution centre is in Franklin, Tennessee.
Nukote said in a court filing that it had 1,100 employees, $86 million in assets and about $79 million in debts as of March 31 2009. In November 2007, the company said it had more than 3,000 employees.
This is Nukote’s second trip through the local bankruptcy court. It filed under Chapter 11 in 1998, when it was a publicly traded company, and emerged in 2000 with private equity firm Richmont Holdings of Dallas as its majority owner. Richmont Holdings is not filing for bankruptcy protection.
“There will not be any job cuts as a result of the filing,” said Russell Mack, a spokesman for Richmont told Nashville Post.com. “We will continue to conduct business as usual.”