PITTSBURGH Global Recycling Inc. has ceased operations and plans to liquidate following a failed attempt to merge with another company.
The Charlotte, N.C.-based company, which has nearly $3 million in debt, bypassed the traditional Chapter 7 proceedings under U.S. Bankruptcy Code and has opted to wind down its operations in a Delaware chancery court.
The state-level dissolution, known as assignment for the benefit of creditors, is faster and more cost effective than a federal filing, Stewart F. Grossman, an attorney at Bostons Looney & Grossman LLP, told AMM. The state proceeding takes about six months, while federal filings can take 18 months.
Grossman has been appointed as the assignee in the case, and company president Steven Gilbert signed the documents. Gilberts other business, Charlotte-based retail yard Gilbert Iron & Steel, is a separate entity from Global and was not affected by the filing. That operation remains open.
A spokesman for Global Recycling said the company cant comment, as the matter is now in the hands of the court. The company reported liabilities of $2.9 million, but the asset value of cash on hand, receivables and equipment is still being tallied.
Global Recycling, which had been exporting copper-bearing electric motor scrap to Asia since 2004, was hit by the 2008 financial crisis, Grossman said in a letter to investors.
Global attempted to merge with unnamed Asian investors with a Midwest presence, but the deal didnt come to fruition, according to the letter. The recycler then attempted to have vendors extend its payment terms while it sought new lenders, but no money became available.