Major Toledo Manufacturer Files Chapter 11

June 5, 2020

On June 1, 2020, Libbey Inc., Libbey Glass Inc., and their domestic affiliates and subsidiaries filed a Chapter 11 Bankruptcy petition in Delaware. Having accumulated debt of $500 million and suffering a reported net loss of $69 million in 2019, the Toledo company is seeking to restructure its balance sheet. In addition to the significant debt, the impact of COVID-19 resulted in the halt of production with temporary and permanent lay-offs, leading to a substantial decline in revenue. The Chapter 11 will allow normal operation of the business to continue as debtors-in-possession. Libbey’s foreign affiliates—including subsidiaries in Canada, Mexico, and China—did not file Chapter 11 petitions.

With its First Day filings, Libbey is seeking authority to honor workforce obligations including employee wages, benefits, and reimbursement programs; insurance and bonding obligations; and customer incentive programs. Libbey also moved to authorize financial institutions to honor checks and requested permission to pay certain claims by shippers, lien claimants, and critical vendors. Libbey is asking for approval of the restructuring plan within 100 days, allowing deleveraging of the balance sheet, which it asserts will benefit all stakeholders.

On June 2, 2020, Libbey Inc., was granted permission to utilize $30 million of its post-petition financing to give it time to negotiate restructuring of the debt. Creditors, including vendors and providers of services, who have an outstanding balance with Libbey should file a proof of claim with the Delaware Bankruptcy Court. Although a deadline for filing claims has not been set, there is no reason to delay filing a claim as the case may move quickly. The lawyers at RCO Law can assist in filing such claims.

 

Hosted on the FirmWisesm Platform

×

For Important Legal Updates and Resources on the Coronavirus Click Here.