ATLANTA — Wellman Inc. has filed for Chapter 11 protection, citing its debt obligations and various business difficulties, including damage and disruption of operations at its facility in Bay St. Louis, Miss., caused by Hurricane Katrina in August 2005. The Fort Mill, S.C.-based polyester fiber and packaging resins manufacturer filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code for the Southern District of New York. Thomas Duff, chairman and CEO, said filing for Chapter 11 allows Wellman to continue operating without interruption while continuing to pursue its previously announced strategic alternative process.
“Although the company has taken numerous steps to reduce its debt and strengthen its balance sheet through the disposition of certain businesses, headcount reductions and other cost reductions, these actions were not sufficient to offset the deterioration in business conditions and the cost of our substantial debt obligations,” he said in a statement.
Difficulties encountered by the company include competitive challenges in the commodities market in which it is primarily involved, including very tight margins resulting from raw material supply and pricing, capacity utilization, customer demand and competition.
Wellman’s recent efforts to streamline operations and refinance debt, and the sale last summer of its European business have not been sufficient to reverse the company’s fortunes, Wellman said.