MMFX Technologies files Chapter 11 bankruptcy, secures $5 million loan

By Caroline Salls

Pittsburgh, Dec. 14 - MMFX Technologies Corp. and subsidiaries MMFX Steel Corp. of America and Fasteel Corp. filed Chapter 11 bankruptcy Tuesday in the U.S. Bankruptcy Court for the Central District of California.

The company said a decline in orders for steel left the MMFX Canadian subsidiaries without the cash flow needed to service both the $60 million in secured loans and their operations.

In conjunction with the filing, MMFX has obtained a commitment for up to $5 million in debtor-in-possession financing from pre-bankruptcy lender Lindsey Davidson.

Interest will be 12%.

The facility will terminate on the earliest of the closing of a sale of substantially all company assets, the effective date of a plan of reorganization and upon conversion or dismissal of the bankruptcy case.

According to court documents, MMFX has $100 million to $500 million of assets and $50 million to $100 million of debt.

The company's largest unsecured creditors are Fourth Third LLC of New York, with a $37.2 million loan claim, and Investment Funding, Inc. of Parker, Colo., with a $5.39 million loan claim. MMFX did not list any other unsecured creditors with claims of $1 million or more.

MMFX is represented by Sheppard Mullin Richter & Hampton LLP.

MMFX is an Irvine, Calif.-based materials science company. The Chapter 11 case number is 10-27572.

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