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Irvine Alloy Maker Alyn Files for Liquidation

Bankruptcy: Company has lost $37 million in five years. Its shares have lost 92% of their value this year.

August 02, 2000|From Dow Jones Newswires

Alyn Corp., saddled with mounting annual losses and turmoil in the board room, disclosed Tuesday that it is moving to liquidate.

The 10-year-old Irvine company, which makes products from a high-tech metal material, filed a liquidation petition on Monday in U.S. Bankruptcy Court in Santa Ana, according to a report to securities regulators.

Nasdaq said it halted trading in the company's stock and requested additional information. The shares, which have lost 92% of their value so far this year, last traded at 16 cents, down 3 cents.

The bankruptcy petition wasn't immediately available, but Alyn has racked up more than $37 million in losses over the last five years on meager sales. Last year alone, it lost $15.2 million on $2.25 million in sales. Its latest annual report also noted that the company might not have sufficient working capital if it didn't raise funds in the second quarter.

Early last month, the chairman and another board member--both executives of a major Alyn investor--abruptly resigned after only eight months on the board.

The company gave no explanations for the resignations of Robert L. Burr as chairman and David J. Edwards as a director. They are executives of Fleming Asset Management, which was part of a group that provided $7.5 million in equity financing for Alyn last year. Alyn said at the time that Fleming continued to be supportive of the company.

Alyn executives could not be reached for comment late Tuesday.

Under the Chapter 7 bankruptcy petition, a trustee is appointed and charged with collecting and liquidating all property of the estate before distributing the proceeds to creditors and others.

The company has been authorized to hire Marschack Shulman Hodges & Friedman LLP as its bankruptcy counsel.

In the company's most recent quarterly report filed with the SEC, Alyn reported assets of $22.3 million and liabilities of $10.6 million as of March 31.

For the three months ended March 31, the company reported a net loss of $1.8 million, or 17 cents a share, compared with a loss of $2.7 million, or 25 cents a share, for the three months ended March 31, 1999.

Alyn Corp. produces Boralyn, an advanced metal alloy billed as stronger than steel and lighter than aluminum, with principal applications in the nuclear, aerospace, automotive, computer hardware and sporting goods industries.

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