L.A. Metals Firm Files Chapter 11
C.D.H. Metals Inc., a Los Angeles metals processing company that emerged from one of California’s oldest companies, Ducommun Metals Co., has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The company and its subsidiaries--Stalco International in Pittsburgh, Centaur Metals of Cleveland, House of Stainless in Chicago, Able Metals Manufacturing Co. of Chicago and Los Angeles-based Ducommun Metals--filed a petition for reorganization in U.S. Bankruptcy Court in Los Angeles late Wednesday, listing total assets of $82.62 million and total liabilities of $82.59 million as of Oct. 31, 1984.
Lawrence Bass, a Century City lawyer who is handling the company’s Chapter 11 petition, said Thursday: “I am rather sure there are going to be some layoffs” in the company’s 315-person work force. But he declined to speculate how many workers might lose their jobs. C.D.H. Metals is a leading distributor of ferrous and non-ferrous metals, which it obtains from mining concerns to resell to metal fabricators. It grew out of Ducommun Metals, which was founded here in 1849.
In 1981, Ducommun Metals was sold by its parent company, Los Angeles-based Ducommun Inc., to Centaur Metals Services Inc. in Cleveland for about $65 million.
Subsidiary Sold in 1981
Ducommun Inc. is not involved in the current financial reorganization, but the sale of its Ducommun Metals subsidiary in 1981 touched off a bitter legal dispute that ended last February when Centaur agreed to pay Ducommun Inc. $4.3 million as the first installment of a $24-million long-term note.
The petition for reorganization comes less than three weeks after Paul E. Berney, president of Ducommun Metals, announced Jan. 7 that he had acquired C.D.H Metals from Robert Newstadt, a private investor, for an undisclosed price.
Chapter 11 allows a company, under the supervision of a federal bankruptcy court, to continue operating while reorganizing its financial affairs and working out a plan to repay its creditors.
On Thursday, company officials declined to be interviewed or to characterize the extent of their company’s financial problems.
However, the company issued a release stating that the reorganization was primarily the result of “cash-flow problems.”
It added that those problems were “precipitated by one of its unsecured creditors obtaining a writ of attachment against the company’s assets” and could be resolved.
As a stopgap measure, the company said it had obtained interim financing. Over the long term, the company indicated that it “intends to streamline its operating units . . . discontinue certain divisions and . . . consolidate others.”
