NanoMech is asking a bankruptcy judge to dismiss its Chapter 11 bankruptcy case, noting in court filings that its business no longer exists and that there are minimal assets to distribute to remaining creditors or to pay in ongoing court fees.
In a filing Wednesday in the U.S. Bankruptcy Court for the District of Delaware, NanoMech said that it had neither the ability to maintain the Chapter 11 case nor confirm a debt reorganization plan. The Springdale company said continuing with the case will result in NanoMech simply stacking up additional administrative expenses that it wouldn't be able to pay.
Earlier this month, bankruptcy Judge John Dorsey in the U.S. Bankruptcy Court for the District of Delaware, approved two settlements in the matter, clearing the way for the closure of the proceeding that began over a year ago.
Chief executive Jim Phillips retired weeks before NanoMech filed for Chapter 11 bankruptcy protection on April 15, 2019. NanoMech claimed $7.2 million in assets and owed nearly $19 million to its creditors, according to initial bankruptcy filings.
The first recent settlement was between NanoMech's officers and directors and its primary secured creditor, Michaelson Capital of New York. The deal provides a general release to NanoMech's directors and officers. In consideration, the directors and officers' insurer will pay NanoMech $1.7 million, of which about $1.68 million will go to Michaelson and $20,000 to the NanoMech estate. The agreement also includes money allocated to pay any outstanding quarterly fees in the case.
After receiving the payment, Michaelson agreed to release NanoMech of all claims and the company's directors and officers will release Michaelson and others of all claims. The settlement resolves and eliminates disputes between the parties concerning the cause of the company's bankruptcy.
Dorsey also gave the OK for NanoMech to sell 7.3 acres the company had purchased at 2447 Technology Way in Springdale back to the Springdale Public Facilities Board. In recent court documents, NanoMech has asked to sell the land back for $54,825. The board is exercising an option to buy back the property at its initial sale price. The board sold the land to NanoMech in 2013.
NanoMech was founded in 2002.
In late July, the court approved the sale of most of NanoMech's assets free of liens and other legal encumbrances to P&S Holdings for $8 million. The sale closed in early August. P&S is a subsidiary of Houston's Vinmar International Ltd., a global marketing, distribution and project-development company serving the petrochemical industry.
Business on 04/16/2020
CLARIFICATION: According to Springdale-based NanoMech, third party review of NanoMech’s business activities and financials which included the eight year period former Chief Executive Officer Jim Phillips led the company was performed. The post-bankruptcy board of directors’ review determined Phillips acted appropriately and there was no wrongdoing on his part, or by the pre-bankruptcy directors and officers. The timing of filings and settlement was not clear in earlier stories reporting on the bankruptcy case.