Coyne Reorganization Moving Forward
Following the July 31 announcement of a Chapter 11 reorganization case filed in the Bankruptcy Court for the Northern District of New York at Syracuse, Coyne International Enterprises Corp. (Coyne) recently issued a news release confirming that the proposed sale of various properties is moving forward as outlined several weeks ago.
Various questions have been raised in the news media and elsewhere about the planned sales, amid the required issuance of Worker Adjustment and Retraining Notification (WARN) Act notices to employees. This process is intended in part to help ensure a “seamless transition to buyers with no service interruption to customers,” the release said.
“The WARN Act filings were a formality because there will be a change of control in Coyne’s business entities,” said Mark Samson, Coyne’s CEO. “There are buyers lined up for all of Coyne’s facilities. There are two locations that would be impacted by possible layoffs – New Bedford, MA; and Greenville, SC. Under the existing deal, approximately 522 jobs will be preserved out of approximately 620 positions.”
The three planned sales include: New Bedford, which will likely be sold to Clean Uniforms & More!; and Richmond, VA, and Greenville; which will likely be sold to Prudential Overall Supply. Coyne’s existing management team is expected to purchase the remaining plants and service centers, including Bristol, TN; Buffalo, NY; Cleveland; London, KY; Syracuse, NY; and York, PA. All of the proposed sales are tentative, pending the possibility that buyers with higher or better bids may come forward.
Subject to bankruptcy-court approval, NXT Capital LLC has agreed to provide Coyne with $3.5 million in debtor-in-possession financing to finance the company’s operations in Chapter 11. Click here for details