To facilitate the ongoing process of selling its businesses, DCL Corporation, a manufacturer and reseller of color pigments, and its U.S.-based subsidiaries filed voluntary petitions for a court-supervised reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Contemporaneously, the company and its Canadian subsidiaries also commenced court-supervised restructuring proceedings in Canada under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (CCAA).

As part of these filings, DCL entered into a stalking horse asset purchase agreement (APA), under which DCL will sell substantially all of the company’s assets in a sale process under Section 363 of the U.S. Bankruptcy Code. The agreement is subject to court approval and any higher or better offers received pursuant to the bidding procedures proposed as part of the sale process.

DCL’s international subsidiaries in the UK and the Netherlands are not included in the Chapter 11 or CCAA proceedings.

In support of the restructuring process, DCL’s existing lender, Wells Fargo, agreed to provide up to $55 million in debtor-in-possession financing. Following court approval, DCL expects that this financing, together with cash flow from operations, will support the business in normal operations during the court-supervised process.

“We are pleased to enter into this asset purchase agreement and to have the continued support of our lenders as we complete this process,” Scott Davido of Ankura Consulting Group, who is serving as chief restructuring officer of DCL, said. “The U.S. and Canadian restructuring proceedings will facilitate our sale process, address our liquidity challenges, strengthen our balance sheet and better position DCL for the future. Additionally, we thank all of the DCL employees for their continued dedication and tireless efforts during these challenging times.”

DCL will file customary first-day motions with the courts that, once approved, will allow the company to operate its business in the normal course under Chapter 11 and the CCAA, including, among other things, granting authority to pay employee wages and benefits and honor customer commitments in the ordinary course of business. The company will also pay all vendors in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.

To assist with DCL’s restructuring, Ankura Consulting Group is acting as the company’s financial advisor. King & Spalding and Blake, Cassels & Graydon are serving as DCL’s legal counsel and TM Capital is serving as its investment banker.