Firm in Chapter 11 to Be Liquidated Because of Ruling

Metropolitan Circuits of California said Monday that a ruling by a federal bankruptcy court will result in the company’s liquidation and the termination of its 230 employees.

Kenneth Cleveland, a turnaround specialist and a representative for Metropolitan, said U.S. Bankruptcy Judge James N. Barr ruled Friday that the company could not utilize its remaining cash for operations.

Metropolitan, which filed for Chapter 11 bankruptcy protection in November, was seeking the funds to pay for continuing operations. But its largest secured creditor, General Electric Co., wanted the cash preserved for repayment of debt.

The Santa Ana-based company, which makes printed circuit boards, was hurt by a steady slide in sales. It sought to reorganize and continue operations under bankruptcy court protection. But Cleveland said the reorganization was dependent on its use of the cash on hand.

“We attempted to get costs down and break even, but it didn’t happen fast enough,” Cleveland said. “The operating cash ran down.”

As a result of Barr’s order, the company will be liquidated in an orderly manner, and its 230 employees will lose their jobs as the assets of the company are sold off, Cleveland said.

He said Metropolitan Circuits Inc., the parent company of Metropolitan Circuits of California, will also be liquidated, according to an agreement between the company and its secured creditors.

Proceeds of the liquidation will go to General Electric, which is owed $1.8 million, and Advanced Dielectric Inc. in Fremont, which is owed $450,000. Unsecured creditors for the two entities are owed about $6 million.