Claims Now Accepted in Clio Bankruptcy
WILMINGTON, Del. – There may be something to help settle up Clio Holdings LLC’s debts, as a bankruptcy-court officer found the failed company had assets after all.
However, the first place in lane may be reserved for a consortium of bankers seeking repayment of more than $31 million.
Creditors now have until early May to file claims at the federal bankruptcy court here against the fabrication-company consolidator that filed for Chapter 7 liquidation on Jan. 15.
As part of the bankruptcy filing, Clio noted that “no property appears to be available to pay creditors.” However, on Feb. 7, bankruptcy trustee Alfred T. Giuliano told the court on Feb. 7 that he’d found assets that could be used to repay debt.
A Feb. 8 notice from the court informed private-sector creditors that they have 90 days – a May 7 deadline – to file claims. (Government entities get 180 days under federal statute.)
The full schedule of Clio’s assets isn’t available, although the lengthy list of creditors – a 133-page record as of Feb. 5 – makes it likely that any renumeration will be partial at best.
Relief for those creditors, however, may be nil if the bankruptcy court allows enforcement of a November 2016 credit agreement between all of Clio’s subsidiaries and two banks – Citzens Banks N.S. and The Huntington National Bank. Clio used all of its property and interests as collateral and gave the banks first priority (as “Senior Lenders”) for collection.
As of Jan. 2, according to a court filing, Clio owed the banking consortium $25,563,506.35. The filing also notes that “the anticipated value of the Collateral is not sufficient to satisfy the Senior Debt Oblications, and it is anticipated that the Senior Lenders will have an unsecured deficiency claim in excess of $15,000,000.”
In addition, Clio owes Wexford, Pa.-based F.N.B. Capital Partners L.P. (now Tecum Capital) $6 million in a debt that’s second-in-line after the banking-consortium credit agreement.
At least one creditor – Clio’s former landlord for its Chantilly, Va., facility – filed for earlier action to take possession of vehicles left on the property and move out fabrication equipment to make the building ready for new tenants.
Lee Road Properties LLC noted that the terms of a September 2016, $29,000-a-month lease with a Clio subsidiary would give them the rights to the “abandoned” vehicles and funds to take out the equipment.
The landlord’s filing with the bankruptcy court noted that the company made numerous attempts to collect unpaid rent, and filed an eviction notice in Virginia courts on Jan. 15 – the same day that Clio filed its federal bankruptcy petition that put a temporary hold on the eviction.
Lee Road Properties noted that back rent, interest and other fees on the property totaled $351,008.26.
At least one other landlord is following the bankruptcy case closely. Legal counsel for John Bishop and Bishop Family Properties LLC filed a motion of interest on Feb. 18; Bishop is the previous owner of US Marble and is owner of at least one property used by Clio in Johnson City, Tenn.
Get the news of the industry with Slab & Sheet, the e-newsletter from Stone Update. Sign up for free delivery here.
For the latest industry info, check Stone Update on Twitter and Facebook.
Experience the totally new Stone Update Magazine online.
