KANNAPOLIS, N.C., Sept. 7, 2018 /PRNewswire/ -- Product Quest Manufacturing, LLC, filed a voluntary petition for relief today under chapter 11 of the United States Code (the "Bankruptcy Code") at the United States Bankruptcy Court for the Middle District of North Carolina.
The Debtors are authorized to operate their business as debtors-in-possession under the jurisdiction of the bankruptcy court for the purpose of winding down operations at the Company, which manufactured primarily over-the-counter (OTC) drugs and cosmetics, as well as some prescription drugs and animal health products.
This filing was caused by financial distress created by product quality, regulatory compliance issues and product recalls affecting the company's Daytona (FL) Facility, which ceased operations as of July 30, 2018, as well as compliance issues under remediation at the Kannapolis (NC) Facility.
As problems with the Daytona Facility were uncovered and became public, the costs associated with the Kannapolis remediation efforts continued to increase and the financial condition of the Kannapolis Facility began to falter. In mid-August, the Kannapolis Facility lost multiple key customers, and the Company determined that it was not generating sufficient cash to sustain its ongoing business operations.
The Company engaged in discussions with its senior secured lenders regarding potential additional financing to fund the operations at the Kannapolis Facility while the Company sought a potential buyer for that facility. However, given the deteriorating financial performance and the significant costs associated with maintaining the operation through a sale process, the lenders were unwilling to advance additional funds to the Company.
As a result, the Board decided that the best course for the Company in order to maximize value for its stakeholders was to cease operations at the Kannapolis Facility, in addition to the already closed Daytona Facility, and commence chapter 11 proceedings.
Contact: Crystal McBride, (704) 939-4300
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The Debtors are authorized to operate their business as debtors-in-possession under the jurisdiction of the bankruptcy court for the purpose of winding down operations at the Company, which manufactured primarily over-the-counter (OTC) drugs and cosmetics, as well as some prescription drugs and animal health products.
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This filing was caused by financial distress created by product quality, regulatory compliance issues and product recalls affecting the company's Daytona (FL) Facility, which ceased operations as of July 30, 2018, as well as compliance issues under remediation at the Kannapolis (NC) Facility.
As problems with the Daytona Facility were uncovered and became public, the costs associated with the Kannapolis remediation efforts continued to increase and the financial condition of the Kannapolis Facility began to falter. In mid-August, the Kannapolis Facility lost multiple key customers, and the Company determined that it was not generating sufficient cash to sustain its ongoing business operations.
The Company engaged in discussions with its senior secured lenders regarding potential additional financing to fund the operations at the Kannapolis Facility while the Company sought a potential buyer for that facility. However, given the deteriorating financial performance and the significant costs associated with maintaining the operation through a sale process, the lenders were unwilling to advance additional funds to the Company.
As a result, the Board decided that the best course for the Company in order to maximize value for its stakeholders was to cease operations at the Kannapolis Facility, in addition to the already closed Daytona Facility, and commence chapter 11 proceedings.
Contact: Crystal McBride, (704) 939-4300
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SOURCE Product Quest Manufacturing, LLC
