Valley Media Files for Chapter 11 Bankruptcy Protection21 Nov, 2001 By: Joan Villa
Valley Media Inc. on Tuesday filed a voluntary petition for relief under Chapter 11 of the federal bankruptcy code in the United States Bankruptcy Court for the District of Delaware.
No trustee, receiver or examiner has been appointed, and the company will act as debtor-in-possession while being subject to the supervision and orders of the court, according to a company press release.
On Nov. 16, the distributor further reduced staff levels at its Woodland, Calif. facilities by approximately 200 employees. Valley previously furloughed substantially all of its employees in its Louisville,Ky. distribution facility in October. The company plans to seek court authorization to continue to support its customers from its Woodland, Calif. distribution facility, and to provide for its post-petition trade and employee obligations during this process, the company said.
Valley c.e.o. Peter Berger said the filing was "not a suprise... We had hoped to put a transaction together that afforded us something, but when it didn't materialize two weeks ago, we've been working with our lender, and we felt it was best for all parties to get the protection of the court and go forward with that," Berger said, referring to a possible sale that might have saved the company.
Berger said they'll have first day orders before the court probably early nextweek which will address maintaining operations -- where "we sit down withinterested parties and come up with an accord we can all live with."
Berger stressed relationships with creditors were "not adversarial... We feel remiss we have to enter into this thing and we want to get bestvalue for all."