Encompass Services files for Chapter 11; negotiating DIP

By Sara Rosenberg

New York, Nov. 19 - Encompass Services Corp. filed for reorganization under Chapter 11 and is currently in discussion with senior lenders to secure debtor-in-possession financing.

The company is also negotiating with primary surety bond providers to secure additional bonding capacity during the bankruptcy process.

"We are confident that we will reach agreements in short order for DIP financing and additional bonding capacity. We appreciate the support we have received thus far from our senior lenders and surety providers," said Michael F. Gries, director and chairman of Encompass Services, in a news release.

The company anticipates filing a plan of reorganization by year-end.

"We believe today's filing alleviates much of the uncertainty that has surrounded our business in the last few weeks and months," said Joe Ivey, president and chief executive officer, in a news release. "We look forward to moving rapidly through the Chapter 11 process."

As was previously reported, the company tried to gain creditor support of a proposed restructuring plan in October but this plan did not receive the necessary votes for approval.

Weil, Gotshal & Manges, LLP is serving as the company's legal advisor.

Encompass Services is a Houston, Tex. provider of facilities systems and services.

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