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Ohio Bankruptcy Watch: Real Alloy Declares Chapter 11

Ohio Bankruptcy Watch: Real Alloy Declares Chapter 11

: Richard West Law Office

Difficult credit and financing conditions have led Real Industry Inc., owner of Real Alloy, to file for Chapter 11 Ohio bankruptcy. Real Alloy, a secondary aluminum producer based in Beachwood, Ohio filed for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware where it is incorporated. The company has scrap aluminum facilities in several U.S. states including Ohio, Illinois, West Virginia, and Wisconsin.

Real Alloy’s Corporate Structure

Real Allow is owned by the Ohio based Real Industry Inc. which is a subsidiary of a larger, global operation. Real Alloy Holding Inc. and its subsidiaries have also filed Chapter 11 bankruptcy petitions for reorganization with the same court. The company operates in Germany, the UK, Canada, Norway, and Mexico.

Factors of Real Alloy’s Bankruptcy

Like most companies, Real Alloy will continue to conduct business during the Chapter 11 bankruptcy process and will continue to provide customers, suppliers, and business partners with the same level of service that they have come to expect. The company stated in its bankruptcy filing that the Alumina and Aluminum production and processing company has both assets and liabilities of $100 million to $500 million. Of the debt Really Alloy is carrying, more than half is owed to 20 of its largest creditors including $1.3 million owed to Commercial Metals Co. in Dallas, and $1 million to Honda Trading America Corp. in Michigan.

Real Alloy Debt Financing

The company, like many scrap trading firms, most likely has a credit insurance policy that will minimize its losses. Real Alloy has indicated that the company has entered into an agreement with its existing asset-based facility lender and a few bondholders for continued use of its $110 million asset-based lending facility and $85 million in additional liquidity through debtor-in-possession financing. It will use this financing to fund its business operations during the course of the Chapter 11 bankruptcy proceedings.