Rabinowitz Lubetkin & Tully, LLC (“RLT”) counseled Custom Alloy Corporation and certain affiliates in the sale of substantially all of their assets pursuant to Section 363 of the Bankruptcy Code to an affiliate of Trident Maritime Systems, LLC. The transaction closed in June 2023. The sale process took place in the U.S. Bankruptcy Court for the District of New Jersey.
Custom Alloy, a family-run business, was a leading manufacturer of seamless and welded fittings, forgings and pipe. The company’s products are utilized in demanding conditions, such as high-pressure lines, corrosive environments, heat severity and nuclear applications. The company produced customized products in an expedited timeframe and reduced costly downtime caused by emergencies, project delays and planned maintenance. These attributes, along with the company’s engineering expertise, led to Custom Alloy being chosen as a supplier to the U.S. Nuclear Submarine program.
For more than 50 years, Custom Alloy primarily served the energy markets. To offset the cyclical nature of the oil & gas industry, however, the company expanded beyond this segment and diversified its customer base to include military, shipbuilding, mining and foreign defense markets. While the company was successful in generating demand in these segments, it was not able to fully capitalize on all available opportunities due to liquidity constraints. When shipping and supply chain issues made things more complicated for the company, RLT facilitated its filing for protection under Chapter 11 of the Bankruptcy Code in 2022.
Trident Maritime Systems provides engineered maritime solutions, specializing in cryogenic insulation, marine outfitting, system integration, automation, hybrid propulsion, energy management, scrubber installation and environmental solutions for shipbuilders and owners in the cruise, military, offshore oil & gas and commercial ship markets.
The RLT team counseling Custom Alloy Corporation was led by Jonathan I. Rabinowitz and included Jay L. Lubetkin, Barry J. Roy, John J. Harmon and Henry M. Karwowski. RLT has represented the company, which had a complicated debt structure, over many years, whenever there were issues concerning bankruptcy. In April 2022, RLT negotiated a forbearance agreement, with its senior secured creditor, including benchmarking. Subsequently, it was involved in negotiations with parties that were interested in purchasing the company. When the purchase offers proved insufficient, RLT helped Custom Alloy file bankruptcy and negotiated with the lender to secure debtor-in-possession (DIP) financing. RLT assisted in bringing in a new investment banker, SSG Capital Advisors, LLC, which identified the successful bidder. RLT obtained Bankruptcy Court approval of the sale and closed the transaction.
