Hours after announcing the company would be sold to a downstate New York firm, Auburn Armature filed for Chapter 11 bankruptcy in federal court, documents show.
The court papers detail Auburn Armature's assets, liabilities and the proposed sale to AAI Acquisition, a limited liability corporation established by New Hyde Park-based Power-Flo Technologies.
Power-Flo Technologies, which owns several electrical and plumbing equipment distributors, is expected to finalize the acquisition of Auburn Armature, an electrical equipment distribution company, within the next 60 days. But the bankruptcy filing adds another layer to the transaction.
According to the bankruptcy filing, Auburn Armature has debts totaling more than $14 million to three lenders, including DeltaPoint Capital, a Rochester-based equity firm that purchased a majority stake in the company in 2013.
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Included in that sum is approximately $5 million owed to KeyBank. Court documents show that Auburn Armature "were obligated to refinance their obligations to Key or enter into an asset sale transaction acceptable to Key." The refinancing efforts were unsuccessful.
The exact amount of Auburn Armature's assets wasn't disclosed. The company's estimated assets are between $10,000,001 and $50 million.
The sale to Power-Flo Technologies won't be final until after a bidding process is complete as outlined in Auburn Armature's bankruptcy filing. Documents indicate that the sale was facilitated by League Park Advisors, an investment bank.
League Park Advisors will help Auburn Armature seek "higher or better" bids for its assets. The company wants to wrap up the bidding process by mid-June and confirm the sale of its assets at a June 16 court hearing.
Geoff Murphy, president and CEO of Auburn Armature, couldn't be reached for comment Monday.
Auburn Armature's fate was questioned after it submitted a Worker Adjustment and Retraining Notification to the state Department of Labor in April. The company indicated that it may close plants and reduce its workforce due to a possible sale.
At the time, Murphy revealed that the company was for sale and the notification was a precautionary action.
On Friday, Murphy announced that Power-Flo Technologies is planning to buy the longtime Auburn business.
Auburn Armature has 119 employees at six locations across the state, including its headquarters in Cayuga County. The company's other facilities are in Albany, Cheektowaga, East Syracuse, Rochester and Vestal.
Power-Flo Technologies has committed to retaining the company's employees.
"I truly believe the acquisition and restructure provides the best outcome for all of AAI's valued employees, while positioning the company to grow its brand and market leader position in the upstate New York industrial, automation and electrical distribution markets," Murphy said Friday.
Online producer Robert Harding can be reached at (315) 282-2220 or email@example.com. Follow him on Twitter @robertharding.