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Encompass stated that, during the Chapter 11 process, it expects operations to continue as normal and customer work to proceed as scheduled. As part of its first day motions, Encompass expects to receive court orders authorizing ongoing payment of its employee wages and benefits, payment of its vendors for goods and services provided under normal credit terms, as well as other customary first day orders.
“We believe today's filing alleviates much of the uncertainty that has surrounded our business in the last few weeks and months,” said Joe Ivey, president and CEO of Encompass. “We look forward to moving rapidly through the Chapter 11 process.”
Encompass has received proposals from and is actively working with its senior bank lending group to secure Debtor-in-Possession (DIP) financing and with its primary surety bond providers to secure additional bonding capacity during the reorganization process.
Encompass stated that it expects to file a plan of reorganization with the Bankruptcy Court before year-end. This plan will anticipate the company continuing its current program of divestitures of non-core or underperforming assets.
Encompass also announced that Michael F. Gries of Conway, Del Genio, Gries & Co., who was previously appointed chief restructuring officer (CRO), was also elected as a director and chairman of the board of Encompass.
J. Patrick Millinor, outgoing chairman of the board, who will remain a director, stated, “I am pleased that we were able to find an individual with Mike Gries's experience and background in restructuring companies to lead Encompass through the Chapter 11 process. Mike has been doing yeoman's work as CRO over the past six weeks, and I am certain of his ability to achieve the best result possible for the company and its various constituencies.”
“I look forward to working with Rick Millinor, Joe Ivey, the rest of the board, and the dedicated employees of Encompass throughout the next few critical months,” Gries said. “We are confident that we will reach agreements in short order for DIP financing and additional bonding capacity. We appreciate the support we have received thus far from our senior lenders and surety providers.”
As previously announced, Encompass began a solicitation on October 18, 2002 to gain creditor support of a proposed restructuring plan to be implemented through a “pre-packaged” bankruptcy. The solicitation period ended yesterday, and the proposed restructuring plan did not receive the necessary votes for approval. Nevertheless, Encompass said it looks forward to reaching agreements quickly with its creditors through the Chapter 11 process.
Publication date: 11/18/2002