Protection file

Nitrocrete and Affiliates File for Chapter 11 Bankruptcy – Loveland Reporter-Herald

FORT COLLINS – Nitrocrete LLC and four affiliated entities, including parent company Nitro Holdings LLC, have filed for Chapter 11 bankruptcy, blaming the disruption caused by the COVID-19 pandemic.

Bankruptcy petitions were filed on November 18 in the U.S. Bankruptcy Court in Denver for these two entities, as well as for affiliates Nitrocrete IP LLC, Nitrocrete Equipment LLC and Nitrocrete Holdings LLC.

Nitrocrete provides solutions for the temperature control of concrete. Its nitrogen application technology unit includes technology and software to maintain nitrogen in liquid form during the concrete cooling process.

“This technology saves time and money for the concrete producing customers of Nitro debtors and owners of large-scale commercial projects, such as high-rise buildings, and civil projects, such as bridges and dams. Said Kathleen Walton, CFO of Nitrocrete. statement presented to court.

The companies employ about 30 people in Fort Collins and remotely in the United States, according to bankruptcy filings.

Walton said in the statement that demand for concrete cooling declined in 2020 due to “unprecedented work stoppages and project delays related to COVID-19.” The companies maintained revenues of $ 12.1 million, gross profit of 53.7% and a net loss of $ 4.8 million.

As of September 30, 2021, the companies recorded revenue of $ 11.9 million and a net loss of $ 3.3 million.

Nitrocrete maintains a term loan and revolving line of credit with Vectra Bank and in 2020 partnered with Mantucket Capital, which acquired a controlling stake in the company for $ 15 million.

The companies also secured interim subordinated debt financing from Nitrocrete founder and executive chairman Drew Nelson and “several related parties” in early 2021 “to continue to repay part of the bank debt, cover expenses of operating and investing in expansion for expected growth, ”according to Walton’s statement. .

“The nature of Nitro debtors’ business is seasonal, with revenues occurring primarily from late spring to early fall,” Walton wrote. “Unfortunately, the debtor faced short-term financial obstacles that forced him to seek redress in this court.” The COVID-19 pandemic has had an impact on the debtor’s operations, and this, coupled with Growing obligations under onerous legacy vendor contracts and a heavy debt burden, created an unsustainable liquidity situation.In addition, an unusually cool season in some concentrated geographies last summer impacted capacity of the debtor to survive until spring.

Prior to filing for bankruptcy, Nitrocrete sought to reduce costs, increase revenue and increase profitability, Walton said, including divesting the company’s old headquarters and signing a new monthly lease. more affordable for office space and a one-year rental of storage equipment. The company has also downsized and has entered into discussions with Vectra Bank over its “troubled” lending relationship.

“Vectra Bank made various proposals to the debtor’s majority investor, but no resolution could be found,” Walton wrote. “It became evident that without an injection of additional capital, the liquidity and debt situation of the old contracts would worsen.”

Walton said that as of October 2021, Nitrocrete engaged with a financial advisor and investment banker to assess strategic alternatives, including “increasing debt, securing funding, securing capital. own and / or the sale of all or certain subsidiaries and equity interests and of all Nitro debtors together. “

“Despite the best efforts of the debtor and its financial advisers and investment bankers, no third party investor has committed to provide any financing or acquisition proposals,” said Walton.

Walton said Nitrocrete believes “he has a strong opportunity to reorganize or sell as a going business. The short term, however, presents a challenge.

In May, Nitrocrete appointed Stephen De Bever as new CEO, replacing founder Nelson, who became executive chairman. De Bever was previously CEO of Standard Precast Inc. in Jacksonville, Florida.

BizWest contacted De Bever, Walton and Matthew Faga, an attorney for Markus Williams Young and Hunsicker LLC of Denver, who represents Nitrocrete.

“I appreciate that you have contacted, but at this time neither Nitrocrete nor my office as bankruptcy counsel have a comment,” Faga said in an email.

Liabilities reported on December 2 for the five entities range from $ 7.24 million for Nitrocrete IP LLC to $ 13 million for Nitrocrete LLC. However, each entity has a common liability, $ 7.2 million owed to Zions Bancorporation NA, doing business as Vectra Bank Colorado.

Assets, liabilities and major creditors include:

  • Nitrocrete LLC reported assets of $ 8,366,060 and liabilities of nearly $ 13.1 million. Its largest unsecured creditors include Air Products and Chemicals Inc., Charlotte, NC, $ 778,816; Linde, Boston, $ 551,529; Matheson Trigas, Dallas, $ 524,467; Beitzel Corp., Grantsville, Maryland, $ 360,592; and Airgas USA LLC, Dallas, $ 313,396. Its main secured creditor is Zions Bancorporation NA, doing business as Vectra Bank Colorado, which owes $ 7.2 million.
  • Nitrocrete Holdings LLC reported assets of $ 1,191,098 and liabilities of $ 7,293,835. Vectra Bank has a secured debt of $ 7,214,270, with Nitro Holdings having an unsecured debt of $ 78,875.
  • Nitrocrete IP reported assets of $ 6,461,768 and liabilities of $ 7,242,227. Vectra Bank has a secured debt of $ 7,214,270, while Polsinelli PC of Kansas City, Missouri, has an unsecured debt of $ 27,957.
  • Nitrocrete Equipment reported assets of $ 9,090,524 and liabilities of $ 11.1 million. Nitrocrete LLC owes $ 3,894,325 in connection with an unsecured claim. Nitrocrete Equipment’s largest secured creditor is Zions Bancorporation NA, doing business as Vectra Bank Colorado, which owes $ 7.2 million.
  • Nitro Holdings LLC reported assets of $ 25,184,956 and liabilities of $ 12,881,205. Its largest unsecured creditors include the Drew R. Nelson Trust No. 2, Bozeman, MT, $ 2,518,274; Mark E. Nelson Trust No. 2, Bozeman, MT, $ 1,399,041; TN Family LLC, Fort Collins, $ 559,616; Tad M. Johnson, Muskego, Wisconsin, $ 448,022; and the Drew R. Nelson Trust No. 2, Bozeman, MT, $ 161,104. Its main secured creditor is Zions Bancorporation NA, doing business as Vectra Bank Colorado, which owes $ 7.2 million.

Nitrocrete topped the Mercury 100 list of BizWest’s fastest growing private companies in 2020, with two-year revenue growth of 731%. Nelson was also named in the 40 Under Forty Class of 2020 category.

Nelson was also named a finalist for the Ernst & Young Entrepreneur of the Year 2021 Mountain Desert Region Award in June 2021.

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