KINGSTON, Pa. --- Diamond Glass Inc., which boasts about a 7 percent share of the U.S. auto glass replacement market, has voluntarily filed for Chapter 11 bankruptcy, the Times Leader newspaper reported.
The filing in U.S. Bankruptcy Court for the District of Delaware listed $105 million in debt -- comprising loans, notes and payments -- and nearly 90 percent of it payable on the first of the month.
Company President Bill Cogswell said that funding from a principal backer, Guggenheim Corporate Funding, will permit Diamond Glass to continue operating while it reorganizes.
Auto glass replacement is a $3.5 billion-a-year market in the U.S.
Diamond Glass has grown from a single store, launched by Avram Levine, to a network of 217 service centers and 900 mobile installation vehicles in 42 states. The company employs about 1,600 people nationwide.
The reorganization plan submitted for bankruptcy court approval calls for Guggenheim to purchase Diamond Glass. But an auction is scheduled for June in order to try to get a better offer than that of Guggenheim. In the absence of the better offer, Guggenheim will own the company.
According to the bankruptcy filing, Diamond owes Guggenheim about $45 million in loan payments. Another $47.3 million is due on notes issued to Diamond's predecessor company, Diamond Triumph Auto Glass Inc., the Times Leader reported. Diamond owes an estimated $13.1 million in unsecured trade debt.