The same $5.7-million loan that troubled Wahlco Environmental Systems Inc. and pushed it into the arms of a Tennessee buyer has prompted the new owner of the Santa Ana manufacturer to file for bankruptcy protection.
Executives at Thermatrix Inc., a publicly traded pollution-control company in Knoxville, said the Chapter 11 reorganization would have “no impact” on what it now calls its Wahlco Air Systems division in Santa Ana.
No layoffs are anticipated at the 62-employee division, which makes industrial pollution-control systems.
“The Orange County operation is going very successfully,” John Schofield, Thermatrix’s president said. “It has a big backlog of back orders, a great group of employees and a great future in front of it. If anything, we’re going to be adding workers.”
Thermatrix bought Wahlco Environmental in January for about $3.8 million in cash and the assumption of the debt.
“We inherited an indebtedness of $5.7 million, which was owed to a very large shareholder called Wexford [Management LLC],” Schofield said. “We are in the process of trying to pay Wexford back but are unable to resolve that. Consequently, we have entered Chapter 11 to protect the company and allow the repayment of Wexford to take place.”
Thermatrix expects to pay Wexford no later than March 31, Schofield said.
The Tennessee company expects to post sales of between $43 million and $45 million this year, Schofield said. Last year, it lost nearly $8 million on sales of $13.6 million.
Thermatrix shares closed Thursday at $1 a share, down 25 cents in over-the-counter trading.