Bankruptcy judge sets asset sale for Texas metal recycler
2 min read
Adobe Stock
A U.S. bankruptcy court set a Sept. 22 bid deadline to purchase assets of a Texas-based metals recycling company that has $293.6 million of revenue bonds outstanding.
Aleon Metals, LLC and its two subsidiaries filed Chapter 11 petitions in the Southern District of Texas Court last month with the aim of selling most of their assets in the wake of financial troubles that led to bond defaults.
The subsidiaries — Aleon Renewable Metals (ARM) and Gladieux Metals Recycling (GMR) — sold a total of $313.5 million of tax-exempt non-rated solid waste disposal facilities revenue bonds through the Brazoria County Industrial Development Corp.
The Chapter 11 cases were consolidated for procedural purposes by a judge, who also approved debtor-in-possession (DIP) financing provided by certain bondholders ahead of the asset sale, according to
“The debtors’ obligations under the DIP facility and related documents are secured by a first priority senior security interest in and lien upon substantially all property and assets of the debtors in favor of the DIP lenders to repay the DIP loans,” the notices said.
GMR sold three series of senior revenue bonds totaling $100 million in 2019 and $38.5 million of subordinated bonds in a single 2020 series. Revenue bonds sold by ARM totaled $75 million in 2022 and $100 million in 2023.
In a court filing, Roy Gallagher, the debtors’ chief restructuring officer, outlined events leading up to bankruptcy, including a malfunction in a sulfur dioxide scrubber that led to materially reduced production, metals price volatility, and unavailable capital investment from equity holders.
“The debtors, their advisors, their lenders, and other stakeholders all believe that commencing these Chapter 11 cases will provide the best opportunity to stabilize operations, implement a value-maximizing sale process and address legacy liabilities in an orderly and transparent manner,” according to the filing, which listed $403.2 million in total outstanding debt, including the revenue bonds.
The Freeport, Texas-based companies’ assets include a facility purchased in 2017 specializing in extracting valuable metals from waste generated by oil refineries.
