NEW YORK (AP) -- Specialty chemicals maker Chemtura Corp. said Wednesday the company and its U.S. operations have filed voluntary petitions for Chapter 11 bankruptcy protection after a recent drop in order volumes led to a sharp decline in its liquidity and cash flow.
Chemtura, which filed in the U.S. Bankruptcy Court for the Southern District of New York, says the bankruptcy filing is designed to help the company complete a financial restructuring.
"Despite our efforts to increase liquidity, including through the potential sale of a business, our reduced liquidity position, combined with the anticipated expiration of our bank waiver, led us to determine that a court-supervised restructuring was the best course of action," said Chemtura Chairman, President and Chief Executive Craig A. Rogerson in a statement.
Chemtura said it has received a commitment for up to $400 million in debtor-in-possession financing from Citibank N.A. as administrative agent. The financing is subject to court approval.
The Middlebury, Conn.-based company said the financing, combined with cash from its ongoing operations, will help keep its operations running during the Chapter 11 process.
Chemtura said it is filing a series of motions with the bankruptcy court to ensure that the company can continue paying its employees and serving its customers.
In December, the company announced that it would cut 500 professional and administrative jobs, or about 10 percent of its work force, as part of a program to slash fixed costs by about $50 million. The company has also suspended dividends, reduced inventories and adjusted plant production to meet reduced demand, among other initiatives.
In February, the company said it would further reduce inventories and restrict capital spending to about $60 million in fiscal year 2009.
Chemtura shares closed flat at 12 cents on Wednesday. The stock peaked at $8.81 in June but plunged amid the market meltdown last fall and never recovered.