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Merit Group files for Chapter 11 bankruptcy amid liquidity issues
By Caroline Salls
Pittsburgh, May 17 - The Merit Group, Inc. filed Chapter 11 bankruptcy on May 17 in the U.S. Bankruptcy Court for the District of South Carolina.
According to the company's website, its liquidity has been impacted by the integration of recent acquisitions.
Merit said it filed for Chapter 11 protection in order to gain more time to restructure, while continuing day-to-day operations.
"We have voluntarily chosen to file for bankruptcy protection under Chapter 11 so the company can continue to operate until a sale of the company is completed or a plan is confirmed," Merit said on the website.
In connection with the bankruptcy filing, the company has received a commitment for $55 million in debtor-in-possession financing from Regions Bank.
Interest will be Libor plus 725 basis points.
The DIP loan will mature on the earliest of three months from closing or the closing of a sale of the company's assets.
According to court documents, Merit has $1 million to $10 million in assets and $50 million to $100 million in debt. In the DIP loan motion, the company said it has roughly $100 million of debt.
The company's largest unsecured creditors are:
• Rustoleum Corp., based in Cleveland, with a $3.22 million trade claim;
• DAP of Cleveland, with a $2.29 million trade claim;
• Minwax, based in Atlanta, with a $1.87 million trade claim;
• Wooster, Ohio, with a $1.38 million trade claim;
• 3M MST6980(WC) of Dallas, with a $1.24 million trade claim;
• Masterchem Industries Inc. of Atlanta, with a $1.21 million trade claim; and
• Duckback Acquisition Corp. of San Francisco, with a $1.18 million trade claim.
Caleb C. Fort holds 62.25% of the common stock in Merit, and E. Fort Wolfe, Jr. holds 37.75% of the company's common stock.
The company is represented by McNair Law Firm, PA.
Merit is a Spartanburg, S.C., paint sundry distributor. The Chapter 11 case number is 11-03216.
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