Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT ON FORM 8-K - U.S. Dry Cleaning Services Corp | usdry_8k-030410.htm |
Exhibit
99.1
March 5,
2010
News
Release:
For
Immediate Release.
US
DRY CLEANING CORPORATION FILES FOR CHAPTER 11 PROTECTION DUE TO ABSENCE OF SMALL
BUSINESS FINANCING
Newport
Beach, CA, March 5, 2010—U. S. Dry Cleaning Services Corporation (UDRY.PK) today
announced that it has filed a voluntarily petition for relief to reduce and
restructure its debts under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the Central District of California in
Santa Ana, California. In addition 7 wholly-owned subsidiary companies owning 78
dry cleaning stores, and 3 central cleaning facilities have also filed for
protection. The Company intends to work with its constituencies to emerge from
bankruptcy as quickly as possible while executing on a plan of reorganization
that preserves the Company’s dominant market positions, and will provide the
necessary capital structure to operate efficiently and profitably.
All
day-to-day operations and business of all the Company’s stores and central
cleaning facilities will continue as usual. From the time of its IPO
completion in September 2007 to September 2009, the company increased its annual
revenues from $8.4 million to over $25 million, making it the largest owner and
operator of dry cleaning stores in the nation with approximately 600
employees. During this challenging period its operational cash flow
improved from a negative to a positive, and its revenues have withstood the
recession, while adding over 400 employees to its payroll.
The
decision to pursue reorganization under Chapter 11 came after extensive efforts
to refinance or extend maturing debt outside of Chapter 11. Over many months,
the Company has searched for capital, and endeavored to negotiate with its
unsecured and secured creditors to obtain the time needed to develop a long-term
solution to the small business credit crisis facing the Company. Unable to reach
an out-of-court consensus, the Company reluctantly concluded that restructuring
under the protection of the bankruptcy court was necessary. During the Chapter
11 cases the Company will continue to explore strategic alternatives and search
the markets for available sources of capital. The Company intends to pursue a
plan of reorganization that reduces its overall debt and leverage, and provides
adequate liquidity for its operations. This will establish a sustainable,
long-term capital structure for the Company.
The
reorganization is the best alternative to protect the interests of the Company's
customers, employees, and stakeholders. Our operation will focus on
continuing improvement of quality, value, and customer service.