After filing for Chapter 11 bankruptcy in the United States back in June 10, 2010, National Envelope Corporation, which two years ago described itself as the largest manufacturer of envelopes in the world, files for Chapter 7 liquidation.
A month after National Envelope Corporation (NEC) filed to restructure under Chapter 11 bankruptcy protection, the Texas-based company, on July 12, 2010, entered an asset purchase agreement with NEV Holdings, which is an affiliate of The Gores Group private equity firm. The asset purchase agreement was for total cash considerations of around $134,500,000 and the assumption of certain liabilities, including $20,000,000 in trade obligations.
The Gores Group then completed the acquisition in September 2010, at a time when National Envelope continued to describe itself as the largest envelope producer in the world, manufacturing 37 billion envelopes annually and generating revenues of around US$600 million. The company had 14 manufacturing facilities, two distribution centres and more than 3,000 employees in the U.S. and Canada (Ajax, Ontario).
As opposed to a Chapter 11 filing in the United States, in which a company typically receives debtor-in-possession financing to restructure, a Chapter 7 filing is a measure for the liquidation of a company – and the most common form of personal bankruptcy when someone has become insolvent.
National Envelope was founded in 1952 by William Ungar.
Eastman Kodak Company, which traces its roots to 1880, today filed for Chapter 11 bankruptcy protection in the United States and indicated that it plans to restructure around digital-capture patents and printing technologies.
Kodak has obtained in debtor-in-possession financing, which amounts to an 18-month credit line from Citigroup to maintain operations through the bankruptcy process. “This is a necessary step and the right thing to do for the future of Kodak," stated Antonio Perez, Kodak’s Chairman and CEO, who took over leadership of the Rochester-based company in 2003.
An article by the Reuters news agency about the bankruptcy filing points out, that in its Manhattan court papers, Kodak had around US$5.1 billion of assets and US$6.75 billion of liabilities at the end of September. The article also notes that Kodak, while still employing 17,000 people, had 63,900 employees just nine years ago.
“Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents… and our breakthrough printing and deposition technologies,” stated Perez.
Kodak expects to complete its U.S.-based restructuring by the end of 2013.
A report by the Wall Street Journal states that graphic giant Kodak is in the process of preparing to file Chapter 11 proceedings. While the report does not cite specific sources, the report does state it expects the company to file "in the coming weeks."
The Rochester, New York-based company has generated much speculation in recent months, with the departure of three board members. The company is due to announce its financial results for 2011 at the end of the month. In recent months, the company attempted to generate funds through the sales of its patent portfolio.
Although it was the dominant player in the film industry during the 20th century, its failure to capitalize emerging technologies, despite being a pioneer in the digital imaging field, led to its decline over the past decade.
In the past month, Kodak's share prices shed more than half its value, causing the New York Stock Exchange to threaten to delist the company. Kodak has been given six months to adhere to the NYSE's listing standard, which is to rise above US$1 at the closing of a trading day.
Read the Wall Street Journal story here.
A week after filing for bankruptcy protection in an Augsburg court, German press maker manroland AG today secured a Euro 55 million credit facility to support its worldwide operations.
The provisional insolvency administrator Werner Schneider reached an agreement for what is referred to as “Massekredit,” which is similar to debtor-in-possession financing.
“Continuation of production and business operations at manroland is therefore secured. The company can continue to do business with customers and suppliers and we are sending a very positive signal to the market,” said Schneider, a financial auditor. “Immediate action was essential as an interruption of production does harm the company and makes the desired sales process more difficult.”
Earlier this week, Vince Lapinski, CEO of manroland North America, commented on how the filing will affect the company’s North American operations, based in Chicago with a satellite office in Toronto: “manroland North America is currently operating in a 'business as usual' status. We would like to assure the industry that manroland Inc. North America is fully operational, and we are continuing to provide the best possible service for our customer."
The new credit facility has a volume of Euro 55 million, which includes Euro 10 million in the form of a cash drawing facility. A further Euro 45 million is to be used as a “partial” mass credit in which the lending banks release part of the forgone loans. The release ensures the required liquidity without the banks having to provide new debt.
manroland states that the financing secures fulfillment of liabilities with customers and suppliers that have placed or received orders with manroland after the company has filed for insolvency. Liabilities originated before the filing will be dealt with as part of the insolvency proceedings later in the process.
UPDATED November 29: PrintAction contacted manroland North America to better understand how the filing of manroland AG will affect the company's operations in Canada and the United States.
Vince Lapinski, CEO of manroland North America, indicated that North American operations, based in Chicago with a satellite office in Toronto, will release further information later this week, while providing the following statement:
“manroland North America is currently operating in a 'business as usual' status. We would like to assure the industry that manroland Inc. North America is fully operational, and we are continuing to provide the best possible service for our customer."
In what Bloomberg describes as Germany’s biggest insolvency over the past two years, manroland AG this morning filed a petition to initiate insolvency proceedings with the Augsburg district court.
The possibility of manroland’s filing for bankruptcy protection was broke yesterday by Reuters and a Frankfurt newspaper, citing sources who claimed the company failed in its search for a new investor.
Reuters reported that shares of Heidelberg, which have lost more than half of their value so far this year, jumped as high as 14 percent on the day, ending with a 8.3 percent rise.
This morning Manroland issued the following public statement about its filing:
manroland AG today filed a petition to initiate insolvency proceedings with the jurisdictional district court at Augsburg, after the negotiations with a potential investor have failed on the home stretch. At the same time the company has filed a request for self-administration in order to finalize the on-going restructuring efforts. The provisional insolvency administrator Werner Schneider will in due course examine the situation at manroland, in order to obtain a comprehensive picture of the situation.
The executive board of manroland aims to rescue key units within the framework of ongoing restructuring efforts as debtor in possession. The initiated insolvency procedure affords the opportunity to step up the restructuring process and guide the company through this difficult phase.
Despite all the disappointment over the path that now has to be taken, the insolvency procedure as debtor in possession offers plenty of prospects because the company has compelling products, the necessary know-how, and an excellent team. With the planned entry of a potential investor and on a basis of a financing program coordinated with the previous shareholders and banks the company’s equity base would have been strengthened.
The decision to file for insolvency was triggered by another dramatic downturn in incoming orders which can be noticed since mid-July and has recently accelerated. Although there is still great interest in manroland’s printing systems, customers are finding it far more difficult to obtain financing in the aftermath of the financial crisis.
At the same time, intensive competition in the face of declining orders has led to even greater pressure on prices and therefore to declining contribution margins. The market size is now only at 50 percent of the level before the beginning of the crisis in 2008. After showing initial signs of recovery from the beginning of the fiscal year and well into the summer, the market took another downturn, particularly in the USA and Western Europe, and in the segment for sheet-fed presses.
The same goes for activities in China, although business there remains brisk. This downturn had an impact on the entire industry, the force of which was not foreseeable. The general representative and the provisional insolvency administrator are now going to promptly review the possibilities for a restructuring. Currently, the business activities of manroland continue to run as normal. manroland employs 6,500 people, thereof 5,000 in Germany.
xpedx, self described as the world’s largest distributor of printing papers and graphic supplies and equipment by revenue and volume, announced it will close its Canadian locations by the end of 2011.
Based in Ohio, as the distribution arm of International Paper, xpedx established a Canadian presence more than four years ago, taking control of a 150,000-square-foot plant in Brampton, Ontario. (See PrintAction November 2007, The Emissary, xpedx Arrives in Canada.)
In 2009, xpedx acquired Gould Paper to expand its presence in Western Canada, with distribution centres in Vancouver, Calgary and Edmonton.
According to a company statement, xpedx will close its four Canadian distribution centres in Toronto and Western Canada by December 31, 2011, and walk-in store locations in Brampton and Markham by November 30, 2011. The closures will affect approximately 110 employees across Canada.
“The closure of our Canadian facilities is a reflection of the structural decline in the print marketplace,” stated Mary Laschinger, President, xpedx. “Going forward, our xpedx growth strategy will focus on our U.S. and Mexico operations where our business is strongly positioned as we serve a wide variety of customers across multiple industries.”
The company’s statement points to its “solid customer base” in the U.S. and Mexico, where xpedx plans to continue investing in its print, packaging and facility solutions segments.
“We recognize this is a very difficult decision affecting our employees, their families and the communities surrounding our Canadian facilities,” stated Laschinger. “Despite the talented and experienced team of employees we have across our Canadian locations, the abundant supply and significant decline in the print marketplace made it difficult for xpedx to grow in Canada.”
HP released its financial results for its third fiscal quarter and also announced drastic new plans which sees the computing giant potentially spinning off its PC business and dropping its newly launched tablet line.
In a surprise move from the company, HP announced it will discontinue its newly launched webOS business, which is based, in-part, on its acquisition of Palm in 2010 for US$1.2 billion. The company is now looking for a buyer for the platform and is holding a fire sale on its TouchPad device, launched only six weeks ago. The company also announced plans to buy Cambridge-based Autonomy Corp., which is the second largest software developer in the UK for US$10.2 billion.
"We're focused on improving performance across the business," said Léo Apotheker, HP president and chief executive officer. "HP is taking bold, transformative steps to position the company as a leader in the evolving information economy. Today's announced plan will allow HP to drive creation of long-term shareholder value through a focus on fewer fronts, thereby improving its ability to execute, invest in innovation and drive a higher-margin business mix."
"Our outlook reflects the challenges that we face across our businesses," said Cathie Lesjak, HP executive vice president and chief financial officer. "Dealing with these challenges will take time, but HP will navigate through the transformation to become a more focused, streamlined company."
Imaging and Printing Group (IPG) revenue declined one percent year over year with a 14.7 percent operating margin. Commercial revenue was down seven percent year over year with commercial printer hardware units up one percent. Consumer printer hardware revenue was up one percent year over year on seven percent unit growth.
HP estimates full-year revenue will be approximately US$127.2 billion to US$127.6 billion, down from its previous estimate of US$129 billion to US$130 billion.
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