Nitrocrete and Affiliates File for Chapter 11 Bankruptcy Protection – Loveland Reporter-Herald
FORT COLLINS â Nitrocrete LLC and four affiliated entities, including parent company Nitro Holdings LLC, have filed for Chapter 11 bankruptcy, blaming disruptions caused by the COVID-19 pandemic.
Bankruptcy petitions were filed Nov. 18 in the United States Bankruptcy Court in Denver for these two entities, as well as for the subsidiaries Nitrocrete IP LLC, Nitrocrete Equipment LLC and Nitrocrete Holdings LLC.
Nitrocrete provides solutions for concrete temperature control. Its Nitrogen Application Technology unit includes technology and software to maintain nitrogen in liquid form during the concrete cooling process.
“This technology saves time and money for Nitro Debtors’ concrete-producing customers and owners of large-scale commercial projects, such as skyscrapers, and civil projects, such as bridges and dams. âsaid Kathleen Walton, chief financial officer of Nitrocrete, in a press release. statement filed in court.
The companies employ about 30 people in Fort Collins and remotely across the United States, according to Missouri bankruptcy filings.
Walton said in the statement that demand for concrete cooling declined in 2020 due to “unprecedented work stoppages and project delays related to COVID-19.” The companies maintained revenue of $12.1 million, gross profit of 53.7% and net loss of $4.8 million.
Through September 30, 2021, the companies had revenue of $11.9 million and a net loss of $3.3 million.
Nitrocrete maintains a term loan and revolving line of credit with Vectra Bank and partnered in 2020 with Mantucket Capital, which acquired a majority stake in the business for $15 million.
The companies also secured interim subordinated debt financing from Nitrocrete Founder and Executive Chairman Drew Nelson and “several related parties” in early 2021 “to continue to repay a portion of bank indebtedness, cover operating and investing in the planned expansion of growth,” according to Walton’s statement. .
“The nature of Nitro Debtors’ business is seasonal, with revenue largely occurring from late spring to early fall,” Walton wrote. “Unfortunately, the debtor faced short-term financial hurdles that forced him to seek redress in this court.” The COVID-19 pandemic has impacted the debtor’s operations, and that, coupled with the increasing obligations under onerous and debt-burdened legacy supplier contracts, created an unsustainable liquidity situation. In addition, an abnormally cool season in certain concentrated geographic areas last summer impacted the debtor’s ability to survive until spring.
Prior to filing for bankruptcy, Nitrocrete was looking to cut costs, increase revenue and increase profitability, Walton said, including abandoning the company’s old headquarters and signing a new monthly lease. more affordable for offices and a one-year rental contract for storage equipment. The company has also reduced its workforce and entered into discussions with Vectra Bank over its “struggled” lending relationship.
“Vectra Bank made various proposals to the debtor’s majority investor, but no solution could be found,” Walton wrote. “It became clear that absent an additional capital injection, the liquidity situation and inherited contractual debt would worsen.”
Walton said that from October 2021, Nitrocrete engaged with a financial advisor and an investment banker to assess strategic alternatives, including “increasing debt, securing financing, equity and/or sale of all or certain subsidiaries and subsidiary interests and all Nitro debtors together.
“Despite the efforts of the debtor and its financial advisors and merchant bankers, no third-party investors have committed to provide financing or acquisition proposals,” Walton said.
Walton said Nitrocrete believes âit has a strong opportunity to revamp or sell as a going concern. The short term, however, presents a challenge.
In May, Nitrocrete appointed Stephen De Bever as CEO, replacing founder Nelson, who became executive chairman. De Bever was previously CEO of Standard Precast Inc. in Jacksonville, Florida.
BizWest contacted De Bever, Walton and Matthew Faga, an attorney for Markus Williams Young and Hunsicker LLC of Denver, which represents Nitrocrete.
“I appreciate you reaching out to me, but at this time neither Nitrocrete nor my office as bankruptcy attorney has any comment,” Faga said in an email.
Liabilities reported on Dec. 2 for the five entities range from $7.24 million for Nitrocrete IP LLC to $13 million for Nitrocrete LLC. However, each entity has a common liability, $7.2 million owed to Zions Bancorporation NA, doing business as Vectra Bank Colorado.
Assets, liabilities and major creditors include:
- Nitrocrete LLC reported assets of $8,366,060 and liabilities of nearly $13.1 million. Its largest unsecured creditors include Air Products and Chemicals Inc., Charlotte, NC, $778,816; Linde, Boston, $551,529; Matheson Trigas, Dallas, $524,467; Beitzel Corp., Grantsville, Md., $360,592; and Airgas USA LLC, Dallas, $313,396. Its largest secured creditor is Zions Bancorporation NA, doing business as Vectra Bank Colorado, which it owes $7.2 million.
- Nitrocrete Holdings LLC reported assets of $1,191,098 and liabilities of $7,293,835. Vectra Bank has a secured claim of $7,214,270, with Nitro Holdings having an unsecured claim of $78,875.
- Nitrocrete IP reported assets of $6,461,768 and liabilities of $7,242,227. Vectra Bank holds a secured claim of $7,214,270, Polsinelli PC of Kansas City, Missouri holding an unsecured claim of $27,957.
- Nitrocrete Equipment reported assets of $9,090,524 and liabilities of $11.1 million. Nitrocrete LLC owes $3,894,325 in an unsecured claim. Nitrocrete Equipment’s largest secured creditor is Zions Bancorporation NA, doing business as Vectra Bank Colorado, which is owed $7.2 million.
- Nitro Holdings LLC reported assets of $25,184,956 and liabilities of $12,881,205. Its largest unsecured creditors include Drew R. Nelson Trust No. 2, Bozeman, Montana, $2,518,274; Mark E. Nelson Trust No. 2, Bozeman, Montana, $1,399,041; TN Family LLC, Fort Collins, $559,616; Tad M. Johnson, Muskego, Wis., $448,022; and the Drew R. Nelson Trust No. 2, Bozeman, Montana, $161,104. Its largest secured creditor is Zions Bancorporation NA, doing business as Vectra Bank Colorado, which it owes $7.2 million.
Nitrocrete topped BizWest’s Mercury 100 list of BizWest’s fastest growing private companies in 2020, with two-year revenue growth of 731%. Nelson was also named in the publication’s 40 Under Forty Class of 2020 category.
Nelson was also named a finalist for the Ernst & Young Entrepreneur of the Year 2021 Mountain Desert Region Award in June 2021.
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