Round Rock, Texas-based American Plumbing & Mechanical Inc. filed for Chapter 11 bankruptcy protection Oct. 13, 2003. It also worked out a financial restructuring plan with its senior lenders. The proposed plan, which must be approved by the bankruptcy court, would convert the company's subordinated debt into preferred stock.
“When AMPAM initially came together approximately four years ago, the company had a strategy of becoming a publicly held company,” said Robert Nagel, AMPAM's corporate executive vice president. “In the past year, we have found that this goal was simply unattainable, as did other consolidators, due to adverse conditions in the capital markets and business challenges in our commercial start-up operations."
In July, AMPAM began looking for a buyer for its remaining commercial plumbing businesses located in Ohio and San Diego, through either a third party or to unit owners, according to the company's Aug. 14 Securities and Exchange Commission filing. (The company began to shut down operations in Sacramento, Calif., and Pensacola, Fla., in August 2002.) These remaining businesses are valued at $9.4 million.
Also in August 2002, the company discontinued the single-family operations in southern Virginia. However, Nagel told PM that AMPAM will continue to concentrate on residential plumbing and HVAC contracting in single family and multifamily new construction, and that the restructuring will have “minimal impact” on these “core” businesses.
With a total of $290 million in company revenues through June 30 of this year, Nagel noted that AMPAM's single-family operation revenues grew 10 percent from the same period last year, while multifamily operations grew 5 percent.
Earlier this year, all four of the company's independent board members left, just after David Baggett resigned as president, COO and CFO. And it was penalized with an $800,000 fee when the company was unable to repay the $76.9 million owed to the banks by July 31.
The company stated that it would file a reorganization plan within 30 days. Bank One Corp. is one of the company's largest creditors, the Austin Business Journal reported.
Fiscal 2002 revenues were $575 million with a net loss of nearly $55 million. AMPAM was ranked No. 4 on PM's 2003 Pipe Trades Giants list.