Strike files bankruptcy; AIP to act as DIP lender, stalking horse

By Sarah Lizee

Olympia, Wash., Dec. 6 – Strike, LLC filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas to facilitate a restructuring, according to a Monday press release.

The company has entered into a stalking horse agreement with affiliates of American Industrial Partners (AIP), the company’s largest debtholder, under which AIP has agreed to acquire substantially all of the company’s assets. The agreement is subject to higher and better offers.

Strike has also received a commitment for about $29 million in debtor-in-possession financing from AIP.

The new financing, together with cash generated from the company’s ongoing operations, is expected to support the business throughout the sale process.

The company expects to operate in the ordinary course throughout the process and remains focused on serving customers and working with suppliers as normal.

“The sale and financing agreements with AIP mark an important step forward in our efforts to strengthen our business and position the company to continue meeting and exceeding the needs of our customers well into the future,” Chuck Davison Jr., chief executive officer, said in the release.

“Since I joined Strike in July, the board and management team have taken a fresh look at the business to evaluate how best to build on our brands’ strong position in the marketplace, improve our financial position and set Strike on a path for future success.

“Based on this review, we have determined that initiating a court-supervised sale process is the optimal path forward for our business and is in the best interest of all our stakeholders.”

The company has filed a number of customary motions seeking court authorization to continue to support its operations during the court-supervised sale process, including the continued payment of employee wages and benefits.

Strike intends to pay vendors, suppliers and other trade creditors in full under normal terms for goods and services provided during the bankruptcy case. Strike said it expects to receive approval for these requests.

White & Case LLP is serving as Strike’s legal counsel, and Opportune LLP is serving as financial and restructuring adviser.

In its petition, the company listed $100 million to $500 million in both assets and liabilities.

The companies largest unsecured creditors are Mears Group Inc., based in Collinsville, Ill., with a $4.1 million litigation claim, Eagle Capital Corp., based in Tupelo, Miss., with a $3.47 million litigation claim, United Rentals Inc., based in Dallas, with a $1.71 million equipment rental claim, Argent Services LLC, based in Dallas, with a $1.59 million trade claim, Michels Corp., based in Brownsville, Wis., with a $1.59 million drilling work claim, Dakota Line Contractors Inc., based in Bismark, N.D., with a $1.35 million road boring claim, and Delta Fuel Co., based in Ferriday, La., with a $1.14 million fuel claim.

Strike is based in The Woodlands, Tex., and is a full-service pipeline, facilities and energy infrastructure solutions provider.

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