Machine Tool Maker Files Bankruptcy; Owes Utica LeaseCo $1.2MM

New Hampshire-based machine tool maker Kingsbury Corp. has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court District of New Hampshire. For over a century, Kingsbury has been a manufacturer of special purpose, high production metal-cutting machine tools, primarily for the auto industry.

According to bankruptcy court filings, Kingsbury owes Utica LeaseCo, Diamond Business Credit and U.S. Small Business Administration (SBA) $1.26 million, $1.34 million and $1.3 million, respectively. The Utica debt arises from a $1.525 million transaction entered into in March 2008.

Kingsbury is seeking an order from court to obtain DIP financing from Diamond in the form of an increase in the inventory advance rate from 20% to 35% with a loan limit of $300,000. The company said the agreement with Diamond for new financing will allow the company to continue operations as it reorganizes.

Kingsbury’s president, Iris Mitropoulis, said the company was faced with Utica’s potential repossession and auction of equipment necessary for continued operations. The company filed for protection on September 30 after reaching agreement with Diamond for new financing that the company said will provide continued working capital to allow the company to continue operations as it reorganizes.

According to its website, Utica, MI-based Utica LeaseCo specializes in providing asset-based loans to high risk companies. The company notes that its focus is on machinery and equipment as the collateral in sale-leaseback transactions.

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