In almost every bankruptcy, Chapter 11 or 7, creditors are the ones that usually walk away with only a small percentage of what they are owed. Sometimes those creditors only had the bankrupt company for a client and that’s why many of them close their doors forever.
Katerra says it owes $1.29 to $1.55 billion, with from $50 million to $75 million classified as trade payables owed to a contractor or supplier. Another $677 million in the company’s complex capital structure is listed as obligations to sureties that may seek indemnifications, and another $22 million is outstanding in letters of credit.
Katerra said it will keep operating with $35 million in debtor-in-possession financing from SB Investment Advisers (UK) Ltd. Katerra said that projects that Katerra still has underway will proceed. After that, the company will undergo an in-court restructuring and “an orderly wind-down of its business.”
Katerra’s international operations are not included in the company bankruptcy filing in federal court in Houston.
Marc Liebman, the executive now in charge of the company during its bankruptcy, said Katerra will preserve liquidity and wind down work on 82 projects. Those projects represent two out of three dollars of all of Katerra’s expected future revenue.
Numerous creditors now may have to await court rulings to collect the money they are owed. According to Katerra’s bankruptcy court filings, the three creditors owed the most are Grand Rapids, Mich.-based Stiles Machinery, which provides equipment and control systems; Haddad Plumbing & Heating, Newark, N.J.; and Thyssenkrupp Elevator Corp., Atlanta. Katerra owes each between $4 million and $6 million, according to the company.
Twenty-nine other contractors and suppliers are each owed between $1.4 million and $4 million.
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Gary Fleisher is the Managing Director and contributor for Modcoach News and Modular Home Coach.
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