Due in part to a weakened economy and loss of market share to overseas competitors, Endicott Interconnect Technologies filed for Chapter 11 bankruptcy protection. Endicott Interconnect, which is headquartered in Endicott, N.Y., is a microelectronics company that manufactures printed circuit boards and advanced flip chip and wire bond semiconductor packages. Its clients include the United States Department of Defense, Cisco Systems Inc., IBM and Northrop Grumman Corp.
In an attempt to solve its liquidity problems, Endicott Interconnect reduced its operating expenses, refinanced debt and laid off half of its workforce. The company eventually filed forChapter 11 protection when it became apparent that by Sept. 30, the company would run out of money and be forced to shut down operations. Endicott Interconnect claims debt in excess of $85 million and assets of less than $50 million. Endicott Interconnect is also being sued for $11.5 million in damages arising out of a breach of contract claim.
In its bankruptcy filing, Endicott Interconnect cites overseas competition and reduced federal spending as the reason for its financial problems. In fact, despite a 28 percent increase in production of printed circuit boards worldwide, the number of North American manufacturers of these circuit boards fell 40 percent over the last five years. The impact of foreign competition and reduced federal spending can be seen in the drastic reduction in Endicott Interconnect’s revenues. In 2008, Endicott Interconnect reported revenue in excess of $400 million, compared to a projected revenue of less than $100 million in 2013.
A downturn in the economy or a rapidly changing business climate can cause considerable financial difficulties for businesses. Bankruptcy is often the best or only solution. An experienced bankruptcy attorney may be able to help a company weather trying economic times.
Source: NASDAQ.com, “Endicott Interconnect Technologies Files for Chapter 11 Bankruptcy“, Stephanie Gleason, July 11, 2013by