http://www.kccllc.net/documents/0911233/0911233090318000000000027.pdf A confluence of events has led to the filing of these chapter 11 cases. As discussed in more detail in the First Day Declaration, the Company operates in a highly competitive industry that is in the midst of a sustained global recession that has caused business 2 On February 17, 2009, Chemtura Corp. was notified by the New York Stock Exchange (“NYSE”) that it was no longer in compliance with the NYSE’s minimum share price rule, which requires, among other things, that the average closing price of Chemtura Corp.’s common stock be above $1.00 over 30 consecutive trading days. Chemtura Corp.’s stock has not yet been delisted. fundamentals to deteriorate. Among the deteriorating indicators are sharp declines in demand for products and restricted access to credit. In addition, for much of 2008 the industry experienced rapid inflation in the costs of its raw material, energy and freight. Although the inflation in input costs have started to abate, with significantly lower demand, the Company has not yet seen much benefit from the decline due to the sharp reductions in demand. These macroeconomic factors have harmed the Company’s business operations -- and those of its competitors -- by significantly decreasing demand, resulting in lower manufacturing output and higher manufacturing variances, all of which have contributed to an unprecedented decline in the Company’s operating profitability and access to liquidity. 10. The Company’s liquidity has been further constrained by changes in the availability of its accounts receivable facilities. Specifically, and as further described in the First Day Declaration, the eligibility criteria and reserve requirements under the Company’s U.S. accounts receivable facility tightened in the fourth quarter of 2008. Additionally, in December 2008, access to the Company’s European accounts receivable facility was restricted in light of the Company’s financial performance. As a result of the restriction of availability under these facilities, the Company sought to obtain additional liquidity by replacing the old U.S. accounts receivable facility with a new facility on January 23, 2009 and by attempting to negotiate an amendment to the European accounts receivable facility in early 2009. 11. The Company’s efforts to obtain additional liquidity outside of chapter 11 in the face of increasingly difficult market conditions ultimately have proved unsuccessful. After a review of numerous options, the Debtors determined that the only financing available in order to meet their pressing liquidity needs was the debtor-in-possession financing that is proposed to be provided in these chapter 11 cases. Accordingly, the Debtors have begun these chapter 11 cases, 5 K&E 14268909. during which the Debtors will seek to restructure their debt and reorganize their capital structure while continuing to operate their business, manufacture quality products and meet customer needs.
whats more i've heard management are all shareholders, so we can expect them to defend the common stock. there has been no liquidation of facilities either, although there have been some layoffs. time will tell
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