Custom Alloy receives sign-off for post-petition non-debt financing

Chicago, Dec. 29 – Custom Alloy Corp. may enter into a supplier development fund agreement wherein Electric Boat Corp. will be granted a senior secured post-petition purchase money security interest in certain equipment, namely a heavy forklift truck, according to an order filed with the U.S. Bankruptcy Court for the District of New Jersey.

Custom Alloy has immediate need, the order said, to obtain post-petition financing under the agreement to purchase the truck so that it may fulfill its contracts with Electric Boat. The debtor’s contracts are critical to the national defense as Electric Boat is the primary builder of submarines for the U.S. Navy.

Under the supplier development fund program, the Navy has provided certain funding to Electric Boat to distribute to its subcontractors. The recipients of the funds are required to grant Electric Boat a lien in the acquired equipment.

Custom Alloy, according to the order, may borrow $945,601.92 through the fund to purchase the truck.

Custom Alloy is a High Bridge, N.J.-based manufacturer of specialty metals for seamless and welded pipe fittings and forgings. The company filed bankruptcy on Oct. 13 under Chapter 11 case number 22-18143.

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