Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Exide Technologies Considering Bankruptcy Amid Regulatory Scrutiny
Author: Joel R. Glucksman
Date: June 20, 2013
Key Contacts
Back
Car- and battery-maker Exide Technologies is considering bankruptcy protection under Chapter 11 this summer, sources familiar with the company told the Wall Street Journal.
The company is due to make a $56 million payment in September, but has faced shrinking profitability as a result of higher-than-expected restructuring expenses, reduced demand in a number of markets, and higher lead-input costs, the Journal reports. Adding to the company’s financial strain is the reputational damage suffered to its brand after allegations of violating state environmental laws came to light. Scrutiny from regulators at its Vernon, California, facility forced the division to suspend operations while investigators explore potentially hazardous lead and arsenic emissions at the battery recycling facility, CBS reports. The California Department of Toxic Substances Control, which ordered the shut-down, said it is unsure how long the suspension will remain in place.
The investigation highlights several earlier reports that indicate Exide’s faulty operation of its storm-water system may have violated state laws for several years. The findings of a 2007 report conducted by the California Regional Water Quality Control Board “suggest that in the last three years, Exide has contributed through deposition approximately 424 lbs. of lead in both 2004 and 2005 and 712 lbs of lead in 2006 to the watershed,” CBS notes.
The company’s plan to seek bankruptcy law protection will likely not include its European operations, which represent more than 50 percent of the Exide’s revenue, a source close to the matter told the newspaper. However, Exide noted that it is “evaluating its legal and regulatory remedies” to help it get out from under $700 million in debt. Creditors have already expressed concerns that the company will be unable to make its debt payment in September, the Journal reports.
Exide Technologies currently provides batteries to auto makers, parts suppliers, and retailers throughout the U.S., and recently expanded operations after receiving a $34 million matching grant in late 2009 from the Department of Energy.
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
Author: Robert L. Baker, Jr.
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
Author: Brian D. Spector
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Author: Dan Brecher
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
Author: Brian D. Spector
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.