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Debt Management Law News

May 4, 2010

U.S. Concrete files for bankruptcy protection

U.S. Concrete, a concrete supplier for the construction industry, sought bankruptcy protection from creditors with a plan to reduce its debt by about $272 million.

The Houston-based company listed assets of $389.2 million and debt of $399.4 million as of Dec. 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Del. Forty-three units also sought protection.

U.S. Concrete produces ready-mix concrete, precast concrete products and concrete-related products used in commercial, residential and public works construction projects. The company has 125 fixed and 11 portable ready-mixed concrete plants, seven precast concrete plants and seven producing aggregates facilities.

The company said it has reached an accord with a “substantial majority” of its bondholders on the reorganization plan.

“The proposed plan will reduce the company's subordinated debt by approximately $272 million and significantly strengthen its balance sheet,” U.S. Concrete said in a statement today.

Notes for Equity

The restructuring proposal would swap the company's 8.325 percent notes for the reorganized company's equity, according to the statement. Current shareholders would get warrants to buy up to 15 percent of the new company's stock.

The company biggest equity holders are HBMA Holdings LLC, which owns 8.6 percent, Dimensional Fund Advisors Inc., with 7.3 percent of the stock, and Rutabaga Capital Management LLC, which owns 5.5 percent of the stock.

U.S. Concrete dropped 30 cents, or about 36 percent, to 54 cents as of 12:58 pm in NASDAQ trading.

“We are very pleased that our bondholders are supportive of the steps we have taken to improve our balance sheet and, through it, the long-term health of our company,” U.S. Concrete's Chief Executive Officer Michael W. Harlan said in the statement.

The company said the bankruptcy won't affect operations or suppliers and expects the restructuring to take between 75 and 90 days, according to court documents. U.S. Concrete will seek court approval of an $80 million loan from JPMorgan Chase & Co., as the agent for lenders, to help fund operations while in bankruptcy.

U.S. Concrete and its units 30 largest creditors without collateral backing their claims are owed $298.8 million, court papers show. Wells Fargo Bank NA, as indenture trustee, is the biggest with a claim of $285 million.

Sometimes, debt can be overwhelming, and bankruptcy becomes necessary.
Bankruptcy can sometimes be difficult. If you are considering bankruptcy, contact the Houston bankruptcy lawyers of Weston & Associates, PLLC at 713-623-4242

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