Harnischfeger Industries Inc. and its U.S.-based operating subsidiaries filed Chapter 11 June 7 before Judge Peter J. Walsh (Bankr. D. Del.), listing approximately 1.3 billion in liabilities.
In connection with its filing, Harnischfeger received a commitment of 750 million in debtor-in-possession financing from Chase Manhattan Bank.
"The 31 U.S. subsidiaries filed to address, among other things, an acute liquidity crisis, which the 750 million is intended to address," said James Sprayregen of the Chicago office of Kirkland & Ellis, who is debtor's counsel along with colleagues Matthew Kleiman and Anne Huber. "But there are over 200 domestic and foreign entities located throughout the world. The interplay between the U.S. and foreign entities will be a very critical element of the case and there will be multiple cross border issues."
Foreign subsidiaries are located in such diverse locations as the United Kingdom, Australia, Poland, South Africa, Germany, Austria, Canada, and more.
"We had first day hearing [June 7]," Sprayregen said. "Virtually all the requests for relief were granted, including a 235 million interim use of the DIP facility with final hearings set for June 28. The creditors' committee formation meeting will be on June 22."
The debtor, whose U.S. operating subsidiaries include Joy Mining Machinery, P & H Mining Equipment and Beloit Corp., will cease interest payments on its debt, including its publicly-traded debentures.
Harischfeger Industries is a global company with business segments involved in the life-cycle management of equipment for underground mining, surface mining, and pulp and papermaking.
Local counsel is Laura Davis Jones of Young, Conaway, Stargatt & Taylor in Wilmington, Del.