Published Monday, Jan. 12, 2009 | 10:36 a.m.
Updated Tuesday, Jan. 13, 2009 | 5:49 p.m.
Tronox Inc., one of the largest industrial manufacturing companies located in the BMI Complex near Henderson, filed for bankruptcy protection Monday morning New York.
The company filed for Chapter 11 bankruptcy protection, meaning that it will continue to operate during its reorganization, which will be administered by a federal bankruptcy judge.
Tronox has an agreement with its lenders for up to $125 million in debtor-in-possession financing, which will fund the company’s day-to-day operations during the bankruptcy proceedings if approved by the court.
In a letter issued to Tronox customers Jan. 12, company officials stressed that the bankruptcy proceeding would not affect the company’s ongoing operations.
“In short, we do not expect any impact on our relationship with you as a result of today’s announcement,” Tronox Chairman and CEO Dennis Wanlass wrote. “I want to stress that the action taken today is intended to be a financial restructuring by the U.S. operating entities to address balance sheet issues. We will continue to provide you with the high quality products and unparalleled service you expect. Importantly, we stand by our commitments to customers.”
In court filings, attorneys for Tronox said the primary reason for the bankruptcy filing is the company’s financial responsibility for environmental cleanup efforts at and around its BMI plant.
Tronox was spun off parent company Kerr-McGee in 2005. Kerr-McGee was a longtime producer of ammonium perchlorate at the site and has been linked to perchlorate contamination in the groundwater beneath the site. Tronox also produced perchlorate at its plant until 1998.
When Tronox spun off, attorneys wrote, it assumed responsibility for the ongoing cleanup.
A spokeswoman for Tronox said the company has spent between $40 million and $60 million on remediation efforts since it began in 1999 and has reduced the amount of perchlorate in the Las Vegas Wash by 90 percent in that time.
Dante Pistone, spokesman for the Nevada Department of Environmental Protection, said Tronox is responsible for cleaning up about 400 acres of land around its BMI plant, and that responsibility won’t be affected by the bankruptcy filing.
“(The filing) is not a surprise to us,” Pistone said. “Tronox advised us in advance that they’d be doing some financial reorganization. As far as we’re concerned, it’s business as usual as far as the remediation and the costs associated with it.”
Tronox manufactures titanium dioxide, which is used as a whitener in several products, including paint and paper, and electrolytic chemicals. The company has 1,800 employees nationwide, about 100 of which work at the BMI plant manufacturing electrolytic chemicals such as manganese dioxide, which is used in batteries.
The company also has several overseas operations, which were not included in the filing.
Jeremy Twitchell can be reached at 990-8928 or [email protected].