MCSi, Inc. announced on June 3 that the company, along with its domestic subsidiaries, voluntarily filed for reorganization under Chapter 11 of the Bankruptcy Code. The Company is actively engaged in negotiating a comprehensive restructuring plan with the lenders under its secured credit facility and expects to file a plan of reorganization early this summer.
In connection with the filing, the Company reached an interim agreement with the lenders to use cash collateral which, upon court approval, will enable the Company to fund post-petition trade and employee obligations, as well as its ongoing operating needs. To supplement these funds, the Company has also finalized a term sheet with certain of its existing lenders for a $10 million "Debtor in Possession" (DIP) financing facility to provide additional liquidity during the restructuring process. The Company expects to finalize its cash collateral arrangements as part of the completion of the documentation of the DIP facility.
The Company expects to conduct business as usual during the reorganization, including continuing work on its ongoing projects and fully servicing its customer requirements on an uninterrupted basis. Employees will continue to receive wages, and vendors will be paid for post-petition goods and services.
Gordon Strickland, MCSi's President and Chief Executive Officer, stated: "This filing and our agreements with the lenders are important milestones in our efforts to restructure the Company as we work towards a fast-track reorganization. We expect that this substantive progress with our lenders, together with our previously announced restructuring initiatives, will result in a stronger, more competitive MCSi."
Strickland continued: "We appreciate the confidence our lender group, vendor partners, customers and employees have shown us in supporting our efforts during this difficult process."