From The Nashville Post - Nukote Files for Bankruptcy Protection

Updated info about Office Depot and Nukote legal issues on this new post.


The Nashville Post is referencing to this post about Office Depot and Nukote - Who Fires Who?

Printing supplies maker Nukote International Inc., which has a distribution center in Franklin, has filed for Chapter 11 reorganization in Nashville's U.S. Bankruptcy Court.

Nukote, headquartered in Plano, Texas, disclosed that it owes some $14.5 million to its top 20 unsecured creditors. It stated that its assets are worth about $86 million, while its liabilities stand at approximately $79 million. Four subsidiaries filed accompanying Chapter 11 petitions. The five petitions are available here (large .pdf file), and a related filing with further details is at this link.

The filings say Nukote owes lender CIT Group about $30 million on a secured financing package. The company owes $2.6 million to its largest unsecured creditor, Grupo American Industries S.A. de C.V., of Chihuahua, Mexico. Other major creditors are located in Canada, Hong Kong, Vietnam and across the U.S.

Nashville's ABF Freight System Inc., the only local company on the list of creditors, is owed $189,000.

This is Nukote's second trip through the local bankruptcy court. It filed here under Chapter 11 in 1998, when it was a publicly traded company, and emerged in 2000 with private equity firm Richmont Holdings of Dallas as its majority owner.

"There will not be any job cuts as a result of the filing," said Russell Mack, a spokesman for Richmont. "We will continue to conduct business as usual."

Nukote is one of the world's largest remanufacturers of inkjet and laser toner printer cartridges. It currently employs 29 people at its Franklin facility, which local economic development officials used to list as one of the city's largest employers with a workforce of about 250 as of 2005.

Worldwide, the company employs about 1,100, according to one of its filings yesterday. As recently as November 2007, it said in a press release that it had more than 3,000 employees.

In April, an office-products industry blog reported that Nukote's status as a major supplier to retailer Office Depot had come to an end, resulting in significant job losses.

Frank J. Wright, with the Dallas firm Wright Ginsberg Brusilow, is lead counsel for Nukote. Craig Gabbert of Nashville's Harwell Howard Hyne Gabbert & Manner, who was involved in the company's 1998 reorganization, is serving as local counsel in the new case along with Harwell partner Barbara Holmes.