Troubled US film extrusion specialist Gloucester Engineering (GEC, Gloucester, Massachusetts; www.gloucesterengineering.com) has filed for voluntary reorganisation under US Chapter 11 bankruptcy proceedings. This follows a commitment by private equity investor Blue Wolf Capital Fund II (New York, New York / USA; www.blue-wolf.com) to prove debtor-in-possession (DIP) financing of USD 6m to keep operations afloat.

The strained financial situation is a result of a March 2010 filing of Chapter 7 proceedings against the former Battenfeld group company, in which creditors cited outstanding payments of USD 500,000 – see Plasteurope.com of 01.04.2010. The European subsidiary, Gloucester Engineering Europe (Vienna / Austria) was shut down by a court in March due to insolvency.

GEC president Carl Johnson said the Chapter 11 filing, which must be approved by a US bankruptcy court in Boston, Massachusetts, “will not hinder our ability to accept or process existing orders.” He added that the turnaround plan, initiated several months ago, is “achieving the desired results.” Blue Wolf first extended credit to the engineering company in May of this year. In the meantime, order intake and production activity are said to have picked up. GEC has manufacturing activities at its Massachusetts headquarters and through its joint venture in Damman / India, Kabra Gloucester Engineering.