Cinram International Inc. Seeks U.S. Bankruptcy Protection
Cinram International Inc., a maker and distributor of pre-recorded media products, sought bankruptcy protection from creditors in the U.S., after reaching a deal to sell virtually all its assets to units of Najafi Cos.
The Toronto-based company filed Chapter 15 court papers today in U.S. Bankruptcy Court in Wilmington, Delaware, listing more than $500 million in debt and as much as $50 million in assets. Eight affiliates also sought court protection.
Chapter 15 of the U.S. Bankruptcy Code allows foreign companies reorganizing abroad to protect their assets from creditors and lawsuits in the U.S. Cinram is seeking court recognition of its Companies’ Creditors Arrangement Act restructuring case in the Ontario Superior Court of Justice as the main proceeding.
Cinram has reached an agreement to sell almost all its assets to Najafi affiliates for an undisclosed amount, according to a statement today. Cinram’s wireless business and certain real estate assets will be excluded from the sale, which is expected to close by August.
“Cinram will continue its focus on strengthening its competitive position in the market with a much stronger financial footing,” said Cinram Chief Executive Officer Steve Brown in the statement.
The company manufactures and distributes pre-recorded DVDs, Blu-ray discs, audio CDs, and CD-ROMs for movie studios, music labels, publishers and computer software companies.
Cinram has 20 facilities in North America and Europe that can produce as many as 2.1 billion DVDs, 55 million Blu-ray discs and 500 million CDs each year, according to its website. In 2009, it shipped 881 million units to U.S. retailers.
“Cinram is a market leader in its industries with a long track record of best-in-class performance,” Jahm Najafi, CEO of Najafi Cos., said in the statement. “We look forward to a seamless transition for our customers.”
The case is In re Cinram International Inc., 12-11882, U.S. Bankruptcy Court, District of Delaware (Wilmington)
To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at email@example.com
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