DCL begins restructurings in U.S., Canada to facilitate business sale

By Wendy Van Sickle

Columbus, Ohio, Dec. 21 – DCL Corp. said its U.S.-based affiliates filed voluntary petitions for court-supervised reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware, according to a news release.

Concurrently, DCL and its Canadian subsidiaries have also commenced court-supervised restructuring proceedings in Canada under the Companies' Creditors Arrangement Act.

As part of these filings, DCL entered into an asset purchase agreement to sell substantially all of its assets in a sale proceeding under the U.S. bankruptcy code.

The agreement is subject to court approval and any higher or better offers received pursuant to the proposed bidding procedures as part of the sale process.

DCL's international affiliates in the United Kingdom and the Netherlands are not included in the Chapter 11 or CCAA proceedings.

DCL's current lender, Wells Fargo, has agreed to provide up to $55 million in debtor-in-possession financing. Upon court approval, the company said it expects that this financing, along with cash flow from operations, will support the normal operations of the company during the court-supervised process.

DCL is filing first-day motions with the courts to allow it to operate its business in the normal course under Chapter 11 and CCAA, including, but not limited to, granting authority to pay wages and employee benefits and honor commitments to customers in the ordinary course of business.

Scott Davido of Ankura Consulting Group has been appointed director of restructuring for DCL, with Ankura Consulting Group acting as financial adviser. The firm is represented by King & Spalding LLP and Blake, Cassels & Graydon LLP as legal counsel.

A look at the company’s court filings shows an estimated 200 to 999 creditors and estimated liability between $100 million to $500 million. Its estimated assets are listed between $100 million and $500 million.

The top five unsecured claims include a disputed Internal Revenue Service claim of $11.21 million, and four trade claims including $2.63 million from Shepherd Color Co., $2.26 million from Oriental Color Corp., Ltd., $1.01 million from Innophos Inc. and $897,340 from Carlfors Bruk AB, according to the filing.

Based in Toronto, DCL is a manufacturer and supplier of pigments to customers in the coatings, plastics, printing inks and paper industries around the world. Its Chapter 11 case number is 22-11319.

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