HVAC Breaking News

March 10, 2003: Encompass Files Plan Of Reorganization

HOUSTON — Encompass Services Corporation announced that it has taken a significant step toward completion of its restructuring by filing its Joint Plan of Reorganization and Disclosure Statement with the United States Bankruptcy Court for the Southern District of Texas.

The plan indicates that the Residential Services Group of Encompass, which specializes in installing and servicing HVAC and plumbing systems in newly constructed and existing homes, will be reorganized as a new entity. The new company will be headquartered in Dayton, Ohio, with operations in nine states.

According to Encompass, the plan of reorganization is supported by an investment from Wellspring Capital Management, a New York-based private equity firm. The agreement will result in Wellspring and the Residential Services Group management team owning all outstanding shares of the new entity established to carry forward the business.

"Upon confirmation of the reorganization plan, our new company will be focused exclusively on residential services," said Eric Salzer, who is the designated chief executive officer of the new organization. "We see tremendous potential for developing this business going forward."

"Upon confirmation of the plan, the new company will be positioned for solid growth and profitability with a well-financed balance sheet," said Carl Stanton, partner, Wellspring Capital Management. "This business has an experienced management team, a diversified customer base, and a proven financial track record."

Encompass stated that it has completed the sale of substantially all of the company's assets outside of the Residential Services Group.

"We are pleased to be submitting this plan to the court," said Michael F. Gries, chief restructuring officer of Encompass. "We have made significant progress with our restructuring efforts in a short period. We expect to emerge from Chapter 11 in the second quarter of 2003."

Publication date: 03/10/2003

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