Master Graphics Files Chapter 11
CORDOVA, TN—Master Graphics and its wholly owned subsidiary, Premier Graphics, have filed voluntary petitions to reorganize under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court in Wilmington, DE, to restructure the company's $205 million debt.
Michael Bemis, CEO and chairman of the board of directors of Master Graphics, has tried to reassure customers that all will be business-as-usual at the 23 facilities Master Graphics operates in 14 states.
"Our customers should expect to receive the same high quality products and service for which each of our divisions have become known. Although federal law prohibits the payment of prefiling debt without a court order, the company will pay vendors for goods and services received after the filing in the ordinary course of business," Bemis says.
"We appreciate the continuing support that our vendors have demonstrated. And now they have the comfort of knowing the law gives a super-priority status to bills for goods and services received after the filing," Bemis adds.
He also had assurances for his 1,900 employees, saying that they "will continue to be paid without interruption including any accrued wages and expense reimbursements."
Master Graphics officials were in discussions with the majority holders of the company's senior notes to convert substantially all of the bond debt into substantially all of the future equity, while finalizing an agreement with its lenders, led by General Electric Capital, to provide liquidity for purchases of inventory and raw materials, in order to continue servicing customers in the ordinary course of business and for other general corporate purposes.
Bemis, who was appointed chairman of the board in February and named CEO in June, says the filing was necessitated by Master's debt burden and operational inefficiencies attributable to the lack of integration of its 18 business units, most of which were acquired since 1997.