Intermet agent for pre-bankruptcy revolving lenders asks court to convert case to Chapter 7

By Jennifer Lanning Drey

Portland, Ore., Sept. 8 - Intermet Corp.'s administrative and collateral agent for its pre-bankruptcy revolving lenders asked the U.S. Bankruptcy Court for the District of Delaware to convert the company's Chapter 11 case to Chapter 7 for liquidation, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The agent, CapitalSource Finance LLC, claimed the company has suffered continuing operating losses since its August 12 bankruptcy filing and will continue to maintain a negative cash flow indefinitely.

CapitalSource believes Intermet has no identifiable means of obtaining additional funding beyond cash collateral and has insufficient working capital to operate beyond the first week of November.

Additionally, the agent said the company is unable to replenish cash being burned at a rate of $250,000 per day and that it faces imminent rejection of supply contracts with 19 major customers.

"[Intermet's] financial condition is continuing to rapidly deteriorate and the debtors have no realistic hope for a constructive rehabilitation of their business operations," CapitalSource said in the filing.

A hearing has not yet been scheduled.

Intermet is a Fort Worth, Texas-based automotive cast component supplier. Its Chapter 11 case number is 08-11859.

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