Norwood Promotional Products Inc., an Indianapolis-based supplier of customized items like awards and logo-imprinted coffee cups, filed for Chapter 11 bankruptcy protection yesterday in Delaware.
The company, the nation’s second-biggest seller of promotional products, plans to get back on its feet by selling out to Aurora Resurgence, a Los Angeles-based private equity firm, through a court-supervised auction. Norwood currently is controlled by lenders, including an affiliate of the Dutch financial services firm ING Group.
Norwood relocated its headquarters from Austin, Texas, to Indianapolis six years ago. In recent years, it employed about 2,000, including 120 at its downtown headquarters.
The firm had sales last year of $312 million, down from $325 million in 2007, Bloomberg News reported. In bankruptcy papers, Norwood said it closed 2008 with assets of $150 million and debt of $295 million.
Chief Financial Officer Keith Maib told Bloomberg that a flood last year at a Norwood pen-making factory in Iowa had cost it $17 million. He said the company also has $175 million in debt coming due in the next 10 months that it cannot pay.
“Norwood’s soft financial performance earlier this year caused its most recently contemplated refinancing transaction to become unfeasible,” Maib told Bloomberg. “Norwood’s efforts ultimately proved fruitless.”
Norwood said that its current management team, including CEO Paul Lage, will stay on after the sale.