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Gas industry

Conversion Industries Inc. Files for Chapter 11 Bankruptcy Amid Financial Struggles

Strategic Insights

— 1 min read

Conversion Industries Inc. has been facing significant financial challenges, including a default on its loan agreement with CVD Financial Corp. and outstanding debt of $2,331,000 as of April 30, 1995. The company has engaged an underwriter to raise funds, but there is no guarantee that it will ultimately receive the necessary funds to pay off its debt. In light of its financial difficulties, Conversion Industries has filed for reorganization under Chapter 11 of the Federal Bankruptcy Code in the Central District of California.

Key Takeaways:

  • Conversion Industries Inc. has filed for Chapter 11 bankruptcy in the Central District of California due to financial struggles.
  • The company defaulted on its loan agreement with CVD Financial Corp. and has outstanding debt of $2,331,000 as of April 30, 1995.
  • Conversion Industries has engaged an underwriter to raise funds, but there is no guarantee that it will ultimately receive the necessary funds to pay off its debt.
  • The company has been facing a number of challenges, including litigation with a former officer, shareholder class action law suits, and a law suit filed by a former portfolio company.
  • The Securities and Exchange Commission is also conducting a formal investigation of Conversion Industries and several of its related companies.
  • The company believes that its principal assets, primarily equity positions in Beta Well Service Inc., Statordyne Corp., North American Recycling Inc., and Myriad Industries Inc., are trading well below their underlying value and potential for growth.

Statistics:

  • Outstanding debt to CVD Financial Corp.: $2,331,000 as of April 30, 1995.
  • Loan guarantees on loans to three other borrowers of CVD Financial: $4,875,000.
  • Balance due under the loan agreement: $6,206,000 ($2,331,000 + $4,875,000).
  • Company's principal assets impacted by trading halt and delisting procedures: Beta Well Service Inc., Statordyne Corp., North American Recycling Inc., and Myriad Industries Inc.
  • Number of law suits filed against the company: 4 (former officer, two shareholder class action, and former portfolio company).

Sources:

  • "Conversion Industries Inc. Files for Reorganization Under Chapter 11 of the Federal Bankruptcy Code in the Central District of California" (PR Newswire, May 19, 1995)
  • "Conversion Industries Inc. Report on Form 10-QSB for the Quarter Ended March 31, 1995" (Securities and Exchange Commission, May 19, 1995)
  • "Conversion Industries press releases available at no charge through PR Newswire's Company News On-Call fax service" (PR Newswire, May 19, 1995)

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