BY | 02-04-2010 | comment profile send pm notify |
BRUNDAGE-BONE CONCRETE PUMPING, INC., AND JLS CONCRETE PUMPING, INC. February 4, 2010 To: Our Customers, Vendors and Industry Partners From: Brundage-Bone Concrete Pumping, Inc. and JLS Concrete Pumping, Inc. Re: Frequently Asked Questions (“FAQs”) About Our Bankruptcy and Our Reorganization ______________________________________________________________________________ Many of you, our customers, vendors and business partners, have asked us questions about how the bankruptcy of Brundage-Bone Concrete Pumping, Inc., and our affiliate, JLS Concrete Pumping, Inc. (collectively, “BBCP” or the “Companies”), will affect you and your ongoing relationship with us. Some of these questions were raised on websites and blogs. Other questions have come up in telephone conversations, face-to-face meetings and other correspondence. Maintaining strong relationships with you and our colleagues in our industry is very important to us, which is why we are providing you with answers (in FAQ format) to your most frequently asked questions below. Furthermore, we encourage you to contact us if you have additional questions. We will distribute answers to your additional questions in a follow up to this FAQ. Q. What risk am I taking if I hire BBCP while it is in bankruptcy? A. While in bankruptcy, BBCP is operating its business as a debtor-in-possession under the supervision of the Bankruptcy Court. Our locations have not changed, our equipment and availability have not changed, and our general operational procedures have not changed. Our pre-bankruptcy management team is running the day-to-day operations of the Companies. We have approximately $15 million of interim debtor-in-possession (“DIP”) financing in place to fund our operations in accordance with a budget approved by our working capital lender, Wells Fargo Bank, National Association (“Wells Fargo”), and the Bankruptcy Court. Our employees are being paid in full and on time. We are paying all employee benefits in full and on time, including all trust fund payments for all union employees. The same insurance carriers and coverage amounts that we had in place before bankruptcy are still in place. Our fuel vendors are being paid currently. In short, with only minor disruptions (all of which are being addressed and resolved as they arise), we are operating as normal. We know that our industry has declined substantially over the last two years – many pumping companies, including BBCP, are over-leveraged and have under-utilized equipment. We are not going to ignore the state of our industry and hope for the best. We want to be the first major pumping company to enter bankruptcy, right-size the debt on our balance sheet, right-size our equipment portfolio, better match our revenues and expenses, restructure our equity ownership and position ourselves for the turnaround in the economy. Hope is not a strategy. We are proactively positioning ourselves to get in and out of bankruptcy and return to profitability as soon as possible. On some websites, one blogger asks the question: "Why would I use a bankrupt concrete pumping service?" For the same reasons you hired BBCP in the past -- we continue to have a nationwide footprint and strong business relationships across the country, we continue to provide excellent service to our customers, we still have the largest fleet of pumping equipment which offers customers the greatest versatility and competitive value, and we still have outstanding employees, customers, vendors and business partners and a committed management team. And, when we exit bankruptcy, BBCP will have a restructured balance sheet, a restructured income statement and a restructured cash flow statement. And, in the meantime, we have the protections of the bankruptcy process to help us get from where we are today to where we want to be when we exit bankruptcy. Q. Are we paying all of our insurance premiums in full and on time? A. Yes. We paid all of our insurance premiums (including all workers compensation premiums) prior to our bankruptcy filing in full and on time, and we are paying all of our insurance premiums (and related deductibles) post-petition in full and on time. Q. Are we paying all of our employees in full and on time? A. Yes. We paid all of our employees (salaries, hourly wages, benefits, union payments, etc.) prior to our bankruptcy filing in full and on time, and we are paying all of our employees post-petition in full and on time. Q. Are we paying all of our fuel suppliers in full and on time? A. Yes. We are paying all of our fuel suppliers post-petition in full and on time. We paid most, but not all, of our fuel bills prior to the bankruptcy filing. We are prohibited at this time by the bankruptcy laws from paying our remaining outstanding pre-bankruptcy fuel bills. In addition, many of the fuel vendors and other trade vendors may have reclamation claims that they can bring, which will allow the Companies to pay such claims as administrative expenses. The fuel vendors and other vendors need to decide if they believe they are entitled to this priority. The Companies issued checks to pay most of these vendors before the bankruptcy filing. Wells Fargo did not honor the checks even though the Companies had funds available in their bank account to cover the checks. Q. Are we planning to downsize our equipment portfolio? A. Yes. We are analyzing which pieces of equipment we will retain and which ones we will ask the Bankruptcy Court for permission to return. We will finalize that list later in the bankruptcy. Q. Did Wells A. No. Wells Fargo never closed our credit facilities or our accounts. We filed for Chapter 11 bankruptcy protection in the District of Colorado on January 18, 2010. We were in the Bankruptcy Court within 36 hours of filing for bankruptcy seeking approval of, among other things, the interim DIP financing from a private equity fund (the “PE Fund”). We negotiated that proposal with the PE Fund prior to our bankruptcy filing. Wells Fargo (and later, several other lenders) objected to the PE Fund’s interim DIP loan proposal. For several days, we operated our business using Wells Fargo’s cash collateral, pending consideration by the Bankruptcy Court of an interim financing solution. During that time, we negotiated a competing interim funding proposal with Wells Fargo, and we paid all of our employees, all of insurance premiums and all of our post-petition fuel bills, as well as other operating expenses. The terms of Wells Fargo’s interim DIP loan proposal were more favorable to us than the terms of the PE Fund’s interim DIP loan proposal – the interest rate was lower, the fees were lower and we were able to keep our existing cash management systems in place at Wells Fargo. After discussing the competing DIP loan proposals with Wells Fargo and the PE Fund, we decided to accept Wells Fargo’s interim DIP loan proposal. It made good business sense. The Bankruptcy Court approved Wells Fargo’s interim DIP loan proposal on January 26, 2010. This financing allows the Companies to pay their expenses in accordance with a budget submitted to the Bankruptcy Court, including expenses for payroll, taxes, fuel, trade and vendor payables, and other post-petition expenses in the ordinary course of business and consistent with our budget. We are currently negotiating the Wells Fargo’s final DIP loan documents. The PE Fund already provided a copy of their final DIP loan documents to us. We will be negotiating those documents this week and expect to finalize them by the end of this week. The interim financing will fund the Companies’ operations through March 1, 2010. At that time, the Bankruptcy Court will hear longer term DIP loan proposals from Wells Fargo, the PE Fund or any other parties interested in submitting DIP loan proposals to the Bankruptcy Court. Q. Do we have enough money to operate now and pay our bills on time? A. Yes. Wells Fargo signed off on our 13-week cash flow budget and the Bankruptcy Court approved it as part of the order approving the Wells Fargo interim DIP loan facility. Our 13-week cash flow budget is a rolling budget. We will update it weekly. We are working on our 180-day budget. We expect to complete that budget in the next week and will submit it to Wells Fargo and the Bankruptcy Court for their approvals. We have sufficient funds in our 13-week cash flow budget to pay all of our ordinary and necessary operating expenses (i.e., wages, benefits, insurance, deductibles, vendors, fuel, etc.) in full and on time. Q. Is your private equity strategy dead? A. Absolutely not. Nothing in our interim DIP financing documents with Wells Fargo prevents us from continuing to negotiate final DIP financing with the PE Fund or any other party interested in providing final DIP financing to us. We are free to talk with anyone we want to about final DIP financing on any terms that are in the best interest of the Companies. We are talking with the PE Fund on a regular basis, consistent with our fiduciary duties to obtain the best deal for the Companies and their creditors going forward. They have advised us that (1) they are continuing to work on their DIP loan documents and intend to file their documents with the Bankruptcy Court in time for the March 1, 2010 hearing on the final DIP financing arrangements, and (2) they are continuing to work with us on a proposed plan of reorganization of the Companies. They have reaffirmed to us their commitment to offer the Companies (subject to obtaining Bankruptcy Court approval) DIP financing on terms superior to any other DIP provider and to assist the Companies in successfully completing the Companies’ reorganization. Q. Who is going to provide our final DIP financing? A. We don’t know the answer to that question right now. What we do know is that Wells Fargo has told us that it intends to send drafts of final DIP loan documents to us this week. The PE Fund has already submitted to us drafts of its final DIP loan documents. No one else has approached us to date about providing final DIP financing, but it could happen. The hearing on the final DIP financing is scheduled for March 1, 2010. We will know more about who will provide the financing and the terms of the financing as we get closer to that date. Q. What are the Examiner and Trustee motions filed by the lenders all about? Are the things they say in those motions about the Companies’ boards of directors and management true? A. Some of the lenders are seeking to bring an Examiner, and subsequently a Trustee, into the Companies to run the Companies. The lenders make a number of allegations against the members of the boards of directors (the “Board”) and management. They allege that the Board is deadlocked. They allege that the founders of BBCP are more interested in getting off their guarantees than they are in doing what is right for the Companies. And, they allege that management is more interested in cutting a deal for themselves going forward than they are in doing what is right for the Companies. None of these things is true. The Board voted unanimously to approve the bankruptcy filing. In fact, every matter approved by the Board in the past 24 months has been approved unanimously. That doesn’t sound like a deadlocked Board. To the Companies’ knowledge, the founders do not have a binding deal with anyone about getting off their guarantees. And, similarly, management does not have a binding deal with anyone about their role with the Companies going forward. The Board and management made the decision to file for bankruptcy because they believed, consistent with their fiduciary duties and in the exercise of reasonable business judgment, that filing for bankruptcy was the right thing to do for the Companies. The lenders may disagree with the Board’s and management’s decisions, but that disagreement is not, in and of itself, grounds for appointment of an Examiner or a Trustee. Moreover, allegations are just that - allegations. As Judge Campbell said with respect to these two motions (and we are paraphrasing – Judge Campbell said this much more eloquently), uncorroborated allegations don’t carry any weight until live testimony is put on and the persons making the allegations are subject to cross-examination. Until that occurs, allegations are just one person’s unproven statements. We are confident that our testimony on these issues will refute the lenders’ allegations and that we will prevail on our opposition to the two motions. Q. What is our plan or reorganization going to look like? A. It’s too soon to tell. Our plan of reorganization will start to take shape after we finalize our longer-term DIP loan arrangements. Q. There are a lot of ugly, nasty statements being made about the Companies on the blogs and elsewhere. Do we intend to do anything about it? A. Yes. We plan to seek the help of the courts in putting an end to any libelous or slanderous statements being made about us on the blogs and elsewhere. We plan to aggressively pursue legal action against any party that publishes libelous or slanderous remarks about the Companies. Q: If you are in bankruptcy, why did management use the Companies’ money to travel to World of Concrete (“WOC”)? A: Management did not use the Companies’ money to travel to WOC. Senior management believes that WOC is an important annual event for all of us in the industry. Now that the Companies have filed for bankruptcy protection and started the reorganization process, we believe that we should use the Companies’ resources solely to strengthen our business and in accordance with the Bankruptcy Court. That is why, this year, the Companies did not pay for management members to attend WOC. Our management members believe in the future of the Companies and the importance of attending WOC, which is why they attended WOC at their own expense. Q: All of the units of equipment listed in the Chapter 11 filing are leased or financed. Why is there debt associated with every single one of these units? A: The bankruptcy petition and related schedules identify those units of equipment that are leased or financed, along with the name of the related creditor. This is done in Schedule D to the bankruptcy petition. All of the equipment, whether it is owned outright or financed, is listed on another schedule, Schedule B. If you compare these schedules, there are many pieces of equipment that are not leased or financed. Q: Where can I get more information? A: We invite you to visit our website (http://www.brundage-bone.com/BBCP/index.cfm, click on the link titled “Restructuring News”) for periodic updates of our bankruptcy and restructuring. For direct access to filings in the bankruptcy case, please visit http://chap11.epiqsystems.com/docket/docketlist.aspx?pk=3562a12d-e15f-432b-ac4e-7a30eaff9555. |
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Joe | 02-04-2010 | reply profile send pm notify |
Hopefully for the loyal people that are left this is true and not true on what or how they (managmenet) see it.....I do find it odd they did not accept any of the blame for this mess themselves. At least that is how I read it..... Sueing people I dont see as the answer to their problem, to me it seems as desperate because what has been said is exactly what they would do to their competitors in my estimation and experience as a former employee and former competitor.... They have been some what of a leader in the industry now is the time to prove themselves all over again. Maybe get your prices to where they should be and maybe it wont take forever to get profitable... No more trading cash flow for profit. I did enjoy my time there as a loyal employee, but not everything is always a two way street and it looks as if it has finally caught up to them. Hopefully they can rise above it and trade their title from the largest pump company to the best pump company.... BY's slogan strive to be the best settle for nothing less has to start from the top down.......Good Luck to the hard honest working people that have made BBCP what it is, unfortunately they dont have much say in this and they should without them the company wouldve never got to where they were before this mess....
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bigpumpb | 02-04-2010 | reply profile send pm notify |
thanks bruce you are a good man to work for!!!!!" strive to be the best settle for nothing less" |
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northwest63 | 02-04-2010 | reply profile send pm notify |
ON SITE NO LINE'S...PUMP ON |
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BIG PAPA PUMP | 02-04-2010 | reply profile send pm notify |
It's been 7 years of great employment and for that i say thank you! I've got nothing but great things to say about the bb machine. Everyone else can say what they will but at the end of the day i'm a proud employee. Thank you. |
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WHO?? | 02-05-2010 | reply profile send pm notify |
YES SIR!!! I'm with BIG PAPPA! I got 5 years in and I love the BIG ORANGE MACHINE !!! been pretty good to me!! |
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JAMESSEDERBURG | 02-05-2010 | reply profile send pm notify |
3 years with Brundage Bone, its been great. GREAT PAY, GREAT BENEFITS, EVEN BETTER PEOPLE. |
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Big Tobacco | 02-05-2010 | reply profile send pm notify |
I am honored to be a member of the Brundage-Bone family... Thanks BY Paul Rohrbach |
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MightyCasey | 02-05-2010 | reply profile send pm notify |
I am a former employee of BBCP. I was not happy on the terms that I left by any means. I gave my heart and soul there. It hurt me dearly how I left. But I have to say that I would not be where I am at today had it not been for the oppurtunites given to me by so many current and former co-workers there. I only wish the best for them in this tumultuous period in time. Thank you for so much that was given to me. Hang in there BY, best to you especially. I know you will come through this. To the others unless you truly know, speak softly and carry a big stick. |
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bigboom | 02-06-2010 | reply profile send pm notify |
six years of great people and equipment. Thanks Bruce and all the people at BBCP. Keep up the good work and looking forward to many more years to come.
Go Big Orange!!!!!!!!!!! |
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Wolfpack41 | 02-06-2010 | reply profile send pm notify |
PropagandaFrom Wikipedia, the free encyclopediaFor other uses, see Propaganda (disambiguation).
Propaganda is a form of
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hmmmm | 02-06-2010 | reply profile send pm notify |
Sounds like that is exactly what you are trying to do in all of your posts. Kinda the pot calling the kettle black. |
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happy jack | 02-06-2010 | reply profile send pm notify |
I'm a fan of the T.V show "The Office" and I think I like it so much because it reminds me of the BB I worked for, I and most of my coworkers worked very, very hard and loved our jobs, we had a very stupid branch manager and Corporate never seemed to have a clue what was going on with us nor did they seem to care they just went off what they were told by the very, very stupid branch manager, kinda like the show "The Office". I have a feeling that BB is a great place to work if you are out west, I've met most of the top guys including BY and always thought they were great guys but if you have a monkey in charge of your branch or in our case a big fat gorilla in charge of several branches you are going to fail. Maybe they were just to big and disconnected or maybe it has something to do with the politicians we have in power doing everything they can to ruin us. Whatever the reason it's not good for anyone if they go down and I'm glad they are trying to make it work. The last thing we all need is all of BB's equipment up for sale dirt cheap. |
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bigboom | 02-06-2010 | reply profile send pm notify |
i agree with you 100% jack |
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Secret Squirrell | 02-06-2010 | reply profile send pm notify |
Thank you Bruce 15 years W/BBCP and more proud to say it every day. PUMP ON! |
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Chris B. | 02-07-2010 | reply profile send pm notify |
I came to BBCP Portland Oregon branch in Oct. 2004. It has been a great place to work and looking forward to many more years! GO BIG ORANGE!!!!! |
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doolittle | 02-09-2010 | reply profile send pm notify |
Happy Jack, How many times do you think that fat baboon saved you from getting fired??
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41bones | 02-11-2010 | reply profile send pm notify |
I have been with Brundage for Three years now. I have not gotten any bad treatment from them at all. I am proud to be a pump operator for such a great company. I have never gotten a late check. Best paying company I have ever worked for. And by far the best equipment. And as such a big company they still treat you like an individual and not a number.. Thank you bbcp......
Shawn Tidd |
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W.T. | 02-18-2010 | reply profile send pm notify |
Wow, its great to hear all you loyal men distribute all this fine praise to the great "Orange Family". You guys are all correct! most of them are pretty good guys. This is not the profile that has created the problem in our industry. With help from the manufacturers, they single handedly created their sientific priceing structer "cost plus 1%". This did not provide all you men, all the luxuries you talk about. Somebody elses money obviously provided that for you. Everybody needs to look past their check stubs, to see that any Pumping Company could have used the Banks money to provide that great place to work. How many men are collecting a Pension check tomarrow? To make a long story short, all those federal taxes that they took out of your checks and the taxes that your next employer will deduct, is what will eventually be the "FUND" that everyone enjoyed for years! Great families come in any color, the color everyone is talking about, is the family that has been big enough to control the nations pricing structure. Thats right! I did say "THE NATIONS" pricing! You can not, ever!!! ever!!! stay in business, after spending money your not erning! I don't know about you guys but, I am applying with the first company that finally figures out, that they have to double their rates. You are so right again! Idid not studder, I said "DOUBLE" I guarentee one thing, if Wells Fargo pumps concrete for one day, they will double their rates. Why, you ask? Because they know, how much they need to pay off their own loans, And make everyone the "Place" you all really talk about! God Bless! and Good Luck to All! P.S. I do not wish anyone in the "Family" you all talk about, any harsh outcomes to them or their families. I can only sit and listen to so much praise about business practices that have this Industry crippled. These are the practices that contribute to the "crippled Country" we all have to share today! |