06.02.10
Medical Molding Manufacturer Morphs into Bankruptcy
All the warning signs were there: The substantial losses and negative cash flows. The large liabilities. And, the sales that weren’t really where they should have been.
With its fiscal health in such a fragile state, medical molder Moll Industries Inc. seemed destined for financial ruin. Its creditors began circling.
Those creditors, however, may have to wait a while to get paid. The Dallas, Texas-based company filed for Chapter 11 bankruptcy protection on April 27 in a Delaware court. The filing was prompted in part by a sheriff’s sale of equipment at its injection molding plant in Seagrove, N.C. According to court papers, a customer—identified as Invensys Controls—had obtained a judgement of $947,000 against Moll and requested the sheriff to sell equipment there. Invensys is a global provider of components, systems and services used in appliances, heating, air conditioning, refrigeration, and residential thermostat products.
Details of Moll’s dispute with Invensys were not included in the bankruptcy filing. But Jeffrey Merritt, Moll’s chief restructuring officer, told Plastics News that the dispute involved the closing of a manufacturing plant by Moll. Invensys, he added, was trying to enforcement the judgement.
Though Moll executives attribute their decision to file for Chapter 11 on the sheriff’s sale (the “main problem forcing it into bankruptcy,” according to court documents), the company’s financial troubles pre-date the failed sale and legal dispute with Invensys by several years.
In 2002, investment advisory firm Highland Capital Management L.P. forced Moll to file for involuntary Chapter 11 protection over a $48.4 million past-due tab on loans. Moll emerged from bankruptcy the following year, and Highland Capital became the company’s owner.
Moll’s biggest financial setback occurred in 2006, when the company ended a 50-year working relationship with Whirlpool Corp. The move caused Moll to close three plants and lose a $60 million chunk of business. After losing the Whirlpool work, Moll entered the medical molding sector, investing in cleanrooms. But rising debts and mounting financial concerns forced the company to consolidate its molding operations into two facilities, Seagrove and Donegal, Ireland.
Last year, Moll generated sales of about $22 million; 75 percent of those sales came from medical molded products, according to court records. As of the bankruptcy filing date, the company had about $16 million in assets and $74 million in debts.
Moll included a partial list of those debts to the bankruptcy court in its filing. The company owes $3.56 million to Pension Benefit Guarantee Corp. of Washington, D.C., for underfunded pensions, and a $1 million judgement to Ranco Inc./RobertShawn Controls of Plain City, Ohio (likely related to its dispute with Invensys). Other outstanding bills include $282,830 to PolyOne for resins, $129,529 to Eastman Chemical Company for raw materials, and $93,288 to Highland Capital for an office lease.
In addition, Moll’s bi-monthly employer taxes amount to $14,500 and its bi-monthly payroll totals $183,500. The cost of employees’ benefit plans comes to $57,000, though 20 percent to 25 percent of the cost is paid by workers.
Despite its bankruptcy filing, the company’s facility in Seagrove remains open and continues to make molded products. The factory employs about 125. Merritt, the chief restructuring officer, said the company has a number of options to emerge from bankruptcy, including a sale.
Moll describes itself as a global injection molder and full-service contract manufacturer serving the medical, appliance, automotive, consumer and industrial markets. The company was incorporated in 1945.
All the warning signs were there: The substantial losses and negative cash flows. The large liabilities. And, the sales that weren’t really where they should have been.
With its fiscal health in such a fragile state, medical molder Moll Industries Inc. seemed destined for financial ruin. Its creditors began circling.
Those creditors, however, may have to wait a while to get paid. The Dallas, Texas-based company filed for Chapter 11 bankruptcy protection on April 27 in a Delaware court. The filing was prompted in part by a sheriff’s sale of equipment at its injection molding plant in Seagrove, N.C. According to court papers, a customer—identified as Invensys Controls—had obtained a judgement of $947,000 against Moll and requested the sheriff to sell equipment there. Invensys is a global provider of components, systems and services used in appliances, heating, air conditioning, refrigeration, and residential thermostat products.
Details of Moll’s dispute with Invensys were not included in the bankruptcy filing. But Jeffrey Merritt, Moll’s chief restructuring officer, told Plastics News that the dispute involved the closing of a manufacturing plant by Moll. Invensys, he added, was trying to enforcement the judgement.
Though Moll executives attribute their decision to file for Chapter 11 on the sheriff’s sale (the “main problem forcing it into bankruptcy,” according to court documents), the company’s financial troubles pre-date the failed sale and legal dispute with Invensys by several years.
In 2002, investment advisory firm Highland Capital Management L.P. forced Moll to file for involuntary Chapter 11 protection over a $48.4 million past-due tab on loans. Moll emerged from bankruptcy the following year, and Highland Capital became the company’s owner.
Moll’s biggest financial setback occurred in 2006, when the company ended a 50-year working relationship with Whirlpool Corp. The move caused Moll to close three plants and lose a $60 million chunk of business. After losing the Whirlpool work, Moll entered the medical molding sector, investing in cleanrooms. But rising debts and mounting financial concerns forced the company to consolidate its molding operations into two facilities, Seagrove and Donegal, Ireland.
Last year, Moll generated sales of about $22 million; 75 percent of those sales came from medical molded products, according to court records. As of the bankruptcy filing date, the company had about $16 million in assets and $74 million in debts.
Moll included a partial list of those debts to the bankruptcy court in its filing. The company owes $3.56 million to Pension Benefit Guarantee Corp. of Washington, D.C., for underfunded pensions, and a $1 million judgement to Ranco Inc./RobertShawn Controls of Plain City, Ohio (likely related to its dispute with Invensys). Other outstanding bills include $282,830 to PolyOne for resins, $129,529 to Eastman Chemical Company for raw materials, and $93,288 to Highland Capital for an office lease.
In addition, Moll’s bi-monthly employer taxes amount to $14,500 and its bi-monthly payroll totals $183,500. The cost of employees’ benefit plans comes to $57,000, though 20 percent to 25 percent of the cost is paid by workers.
Despite its bankruptcy filing, the company’s facility in Seagrove remains open and continues to make molded products. The factory employs about 125. Merritt, the chief restructuring officer, said the company has a number of options to emerge from bankruptcy, including a sale.
Moll describes itself as a global injection molder and full-service contract manufacturer serving the medical, appliance, automotive, consumer and industrial markets. The company was incorporated in 1945.