A major supplier of castings for manhole covers and frames, Neenah Enterprises, Inc., has filed Chapter 11 bankruptcy due to a dramatic plunge in sales revenue. Neenah's Chapter 11 bankruptcy filing lists assets of $286.6 million and debt of $449.1 million.
Neenah, based in the Wisconsin town of the same name, reported a $150 million net loss on net sales of $333 million for the fiscal year ended Sept. 30. In fiscal 2008, net sales were $511 million with a net loss of $12 million.
"The recent dramatic declines in some of the debtors' most significant industrial markets, including heavy-duty truck, construction and farm equipment, have negatively impacted the debtors' operating performance," Neenah said in court papers.
Many of the core industries are struggling during this recession as municipalities and even large private corporations slash budgets even in essential areas. Bankruptcy is becoming a common choice amongst beleaguered businesses such as Neenah, who have found it nearly impossible to break even, let alone make a profit. In the case of Neenah, debts that are soon due weighed heavily on the company's balance sheet, leaving them little choice but to file Chapter 11 bankruptcy if they planned to survive. In Chapter 11 bankruptcy, the company hopes to gain concessions from creditors which will allow them to significantly slash their debt obligations and emerge from Chapter 11 bankruptcy a more viable company. But it is still not clear if Neenah can effectively and successfully negotiate enough concessions that will allow it to emerge from Chapter 11 bankruptcy and become viable while we are still knee deep in this recession. Because Neenah's cash flow depends on the municipalities and the construction industry who are both struggling, its ability to thrive even after Chapter 11 bankruptcy may be an uphill battle.