The U.S. Bankruptcy Court for the Middle District of Florida has issued an order authorizing Benada Aluminum, which filed for Chapter 11 last week, to continue operating its business and managing its property.
As part of the order, the company is permitted to continue paying all of its employees and providing them with benefits “in the ordinary course of business.”
“The court may review, and grant appropriate relief, if such salaries or benefits are later determined to be unreasonable,” writes the court.
In addition, the order allows the Sanford, Fla.-based company to pay all of its necessary and current expenses for operating its business, including taxes, “to the extent that such payments are necessary to preserve the assets or operate the business.”
As part of the agreement with the court, the company will be required to file monthly reports with the court and to provide any information needed for the administration of the state.
Benada’s reorganization plan is due 150 days from the date of its original Chapter 11 filing—on August 1.
The company also has requested the court’s permission to name Brad Aldrich of Transaction Data Processing Corp., as chief restructuring officer.
Additionally, the court has authorized the company to obtain post-petition financing from Wells Fargo Bank in the principal amount of $5 million to be borrowed on an interim basis and $1.25 million from FTL Capital LLC. According to the order, Benada currently owes Wells Fargo approximately $5.7 million in debt developed prior to the Chapter 11 filing and $2 million to FTL Capital.
“The debtor represents that it cannot reorganize unless it is able to use cash collateral and obtain post-petition financing for its business operation,” writes the court. “The debtor believes that continuing to operate its business as a going concern is in the best interests of its estate and creditors.”
Benada Aluminum Products filed for Chapter 11 bankruptcy late last week. The company was formed as a Florida limited liability corporation just more than a year ago, to purchase the assets of two aluminum products manufacturing companies: Florida Extruders International and Benada Aluminum of Florida Inc. (BAF).