Wellman Inc., a company involved in marketing as well as manufacturing of polyester products recently filed for bankruptcy. The Wellman Inc business deal is expected to revitalize the financial condition of the company. Several steps were taken by the company to reduce expenses but to no avail.
This triggered the company to file for Chapter 11 of Bankruptcy Code of USA. Wellman Inc is responsible for manufacturing as well as marketing polyester products, which are of high quality. Some of the best products under its banner include polyethylene terephthalate (Perma Clear� PET), Fortrel�.
Wellman Inc, on 26th February 2008, announced that the company along with some of its subsidiaries filed for bankruptcy by filing with Chapter 11 of US Bankruptcy Code. As per reports, the company has assets (estimated) worth $499 million and debt (estimated) at $684 million.
The officials of the company stated that the company had put in all efforts to prevent bankruptcy.
Some of the measures adopted by the company included:
Downsizing labor force
By disposing off some of its businesses
Reducing expenses in a number of activities.
However, these measures were not sufficient enough to compensate for the expenses and the company had to file with Chapter 11 of Bankruptcy Code of the United States of America (for New York’s Southern district). Wellman Inc received an amount of $225 million (DIP or debtor-in-possession type of financing) from lenders of the prevailing Revolving Credit Facility.
It was declared by the company officials that the amount received by the company due to this Wellman business deal would be utilized for financing expenses related to post petition operations. This also included obligations pertaining to the suppliers as well as the employees. Company reports also state that another reason for this action was “value generation” to the maximum for the shareholders of the company.